boohoo’s share price took a tumble following its warning that its annual sales growth will now fall to 12-14 per cent against its original forecast of 20-25 per cent. Profits will also be impacted with adjusted EBITDA to be between 6 and 7 per cent down from 9-9.5 per cent. Provision for exceptional costs will be up by 50 per cent to £33m, attributed to warehousing investment and caused by warehouse and new brand integration. It has reported revenues for the three months to November 30th which were up by 10 per cent to £506.2 million.
boohoo Group chief executive John Lyttle said: “The current headwinds are short-term and we expect them to soften when pandemic related disruption begins to ease. Looking ahead, we are encouraged by the strong performance in the UK, which clearly validates the boohoo model.
“Our focus is now on improving the international proposition through continued investment in our global distribution network, capable of delivering in excess of £5bn of net sales, to support future growth.”
However, the business, like others, expects the Omicron variant to impact demand and lead to higher levels of returns in January and February. It is also preparing for higher inbound-freight costs which have had an adverse effect on margins across the wider retail sector.
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