Boohoo profit surges but outlook weaker

Boohoo reported annual profit up by more than a third but the online fashion group said revenue growth would be weaker and returns would increase in the current year.

Pretax profit for the year to the end of February rose 35% to 124.7m as revenue jumped 41% to £1.75bn. UK revenue rose 39% and income from international operations increased 44%. Gross margin rose 20 basis points to 54.2%.

The owner of the PrettyLittleThing and NastyGal brands said it benefited partly from shoppers moving online during lockdowns but that there was a big drop in sales of dresses and going out clothes with venues closed and many people working from home.

Boohoo said it expected revenue to grow by about 25% in the current year with newly acquired brand such as Debenhams and Dorothy Perkins contributing about 5 percentage points. The company said trading in the first few weeks of this year were encouraging but that customer returns were likely to rise with carriage and freight costs high.

Shares of Boohoo fell 3.3% to 315.80p at 08:34 BST.

The company has snapped up brands from struggling rivals in the past year including Oasis, Warehouse, Burton and Wallis. It has also been overhauling its supply chain after a scandal about low wages and poor treatment of workers at factories supplying Boohoo.

John Lyttle, Boohoo's chief executive, said: "FY21 has been a year of significant investment for the group as we build a platform for the future and I am very pleased to report a strong financial performance. Our established businesses have continued to grow across all territories as we gain market share with our compelling consumer proposition.

"Our newly acquired brands are being re-energised and made relevant for today's consumer across a broader market demographic. We are very excited about their potential and are already seeing the early rewards from their growth."