Salem Radio Network News Tuesday, December 6, 2022

Business

Britain’s Boohoo cuts outlook as consumers rein in spending

LONDON (Reuters) -British online fashion retailer Boohoo on Wednesday cut its full-year outlook, blaming a worsening macro-economic and consumer backdrop as it reported a 58% fall in first-half core earnings.

The group, whose shares have fallen 70% this year, said on Wednesday it now expected revenue to fall over the full 2022-23 year, with a core earnings margin between 3% and 5%. It was previously forecasting revenue growth in the “low single digits” and an EBITDA margin of 4% to 7%.

It said the lower margin forecast reflected increases in inflation-driven costs as well as the resultant operational deleverage from lower than anticipated sales.

Boohoo, which sells clothing, shoes, accessories and beauty products aimed at 16 to 40-year olds, reported core earnings of 35.5 million pounds ($37.9 million) for the six months to Aug. 31, down from 85.1 million pounds a year earlier.

Revenue fell 10% to 882.4 million pounds, reflecting weaker than expected consumer demand, a significant increase in product returns and increased delivery times for products sold in overseas markets.

“As a result of the impact that the macro-economic and consumer backdrop has had on the group’s revenues in the first half, our expectation is for a similar rate of revenue decline to persist over the remainder of the financial year if these conditions continue,” Boohoo said.

Earlier this month online rival ASOS warned on profit, as did retailer Primark which does not trade online.

($1 = 0.9358 pounds)

(Reporting by James Davey; Editing by Kate Holton)

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