Boohoo FY profit jumps; forward guidance withdrawn due to Covid

Fast fashion retailer Boohoo posted a rise in full-year profit and revenue on Wednesday but withdrew its forward guidance, citing uncertainty over the impact of the Covid-19 pandemic.

In the year to 29 February 2020, pre-tax profit jumped 54% to £92.2m on revenue of £1.2bn, up 44% on the previous year. Boohoo said it saw strong revenue growth across all geographies, with UK revenue up 39% and international 51% higher. International revenue now makes up 45% of total revenue compared to 43% last year.

Boohoo revenue rose 38% to £600.7m, while revenue at PrettyLittleThing was also up 38%, to £516.3m. Nasty Gal revenue surged 106% to £98.8m.

Boohoo said trading since the middle of March has been mixed due to the impact of the pandemic. Although it initially saw a "marked" drop in year-on-year growth, the performance has improved in recent weeks, with year-on-year growth of group sales in April. Still, it remains "cautious" about its outlook because of the virus.

Boohoo said it was not recommending the payment of a dividend and that given the uncertainty caused by the pandemic, it would be inappropriate to provide guidance for the financial year ending 28 February 2021 "at this stage".

Boohoo said it had analysed a range of potential scenarios, factoring in a downturn in demand and the possibility of warehouse closures.

"Although it is not possible to predict precisely the impact from Covid-19, we have ensured that we have stress-tested our liquidity under these scenarios." Boohoo said it’s comfortable the group has sufficient financial headroom.

Chief executive officer John Lyttle said: "Whilst recent events have understandably overshadowed what has been a great year for Boohoo, they have also highlighted its key strengths.

"Although there is near-term uncertainty in the markets that we operate in, the group is underpinned by its incredibly strong balance sheet and is well-placed to leverage its scalable multi-brand platform and to continue to disrupt fashion markets around the world."

At 0855 BST, the shares were up 5.6% at 286.74 p.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Analysts’ ears will have pricked up at news of improved year-on-year trading in April. However, in the current climate nothing is guaranteed, which is why Boohoo decided against providing guidance for 2021. Nonetheless we think credit should be given where it’s due. Prior to the outbreak trading was strong for the group, and crucially international sales have stepped up. With the untapped domestic market shrinking by the day, this is a step in the right direction. As for the more recent spring in boohoo’s step, the strength - and length - of the improvement remains to be seen.

"If discretionary spending is pinched following coronavirus, boohoo’s bargain prices could see it could fare better than rivals in an economic downturn. The full impact of the virus remains to be seen though, and boohoo like many other businesses is navigating uncharted waters at the moment."