tiprankstipranks
Boohoo Group Share Price Falls, Trims Annual Revenue Outlook
Global Markets

Boohoo Group Share Price Falls, Trims Annual Revenue Outlook

Story Highlights

The shares of the British online fashion retailer Boohoo Group dropped by 10% today following a reported decline in first-half revenues. The company also expects reduced sales and profits for the full year.

The share price of the UK-based Boohoo Group PLC (GB:DARK) fell by over 10% after the company trimmed its annual revenue outlook in its half-yearly earnings report for FY24. The company posted a 17% decline in its revenues due to a slower volume recovery amid reduced demand from customers.

Following the announcement, the Boohoo share price experienced a 10% decline in early trading, reaching its lowest level since 2015. In the last six months, the stock has experienced a 45% decline, reflecting the ongoing challenges of declining demand and rising costs.

Boohoo Group PC is a British online fashion retailer established in 2006. The company specializes in offering a wide range of clothing, accessories, and cosmetics through its online platform, targeting customers aged between 16 and 40 years.

Weak Numbers and a Weaker Outlook

The Group posted a revenue of £729 million for the six months that ended on August 31, 2023, which was 17% lower than the previous year. Among its regions, revenue from the UK market experienced a 19% decline, while international markets saw a reduction of 15%. The numbers show the impact of a tougher economic environment on consumer demand.

The gross profit also decreased by 16% to £389 million, as compared to £464 million in the same period last year. However, the gross margin saw an increase of 90 bps to 53.4% during this period. The adjusted EBITDA came at £31 million, down by 12% from the last year. On the plus side, the adjusted EBITDA margin improved by 30 bps to 4.3%, driven by cost control measures and better inventory management.

In terms of outlook, revenues for the full fiscal year ending in February 2024 are now projected to decline by 12% to 17%, up from the expected decline of 5% stated by the company in May. EBITDA is now expected to be in the range of £58 million to £70 million, marking a revision from the previous guidance of £69 million to £78 million.

What is the Forecast for Boohoo Shares?

Today, Jefferies analyst Andrew Wade reiterated his Buy rating on the stock, predicting a growth rate of more than 135%. Wade believes that despite the dull results, the ongoing investments and operational advancements within the business will place it in a favorable position for recovery once demand conditions improve.

As per the consensus among analysts on TipRanks, BOO stock has been assigned a Moderate Sell rating.

Disclosure

Get real-time notifications on news & analysis, curated for your stock watchlist. Download the TipRanks app today! Get the App