Online fashion retailer Boohoo’s full-year results painted a grim picture as its earnings, revenue and sales all dropped – while losses swelled to £159m.
The company said its annual core earnings fell by seven per cent, revenue fell by 17 per cent, and the total value of goods sold fell by 13 per cent, after a tumultuous year in which it made multiple acquisitions.
In spite of the disappointing results, its bosses claimed things are not on quite the same downward slope as they were in 2023. The year on year decline in sales was only four per cent, against nine per cent the year before.
Boohoo’s loss before tax swelled however to £159.9m from £90.7m the previous year. It also said in the UK, which is its biggest market with more than 60 per cent of its revenue, it was at £921.5m in the period, declining by 16 per cent on 2023.
The company, which manages PrettyLittleThing and Karen Millen, cited “difficult market conditions, caused by high levels of inflation and weakened consumer demand” as stumbling blocks.
In recent months, Frasers Group, which is owned by Mike Ashley, has been increasing its stake heavily in Boohoo.
A post-pandemic trend to high-street shopping and an increasing supply of cheap clothes has led to a rocky few years at Boohoo, but group CEO John Lyttle said he had “strong confidence” in Boohoo’s medium-term outlook.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was £58.6mn in the year to 29 February, at the bottom end of guidance of £58-70mn and down from £63.3mn the previous year.
Operating costs fell by 16 per cent after a swathe of cost-cutting measures which included reducing stock levels and increasing automation. Boohoo expect to cut costs by a further £125mn next year.
The company also said in its report to markets this morning, it had slashed its headcount by more than a thousand, down from 6,190 in 2023 to 5,079 this year.
The number of administrators dropped to 2,098 from 2,475 while its distribution team went down further to 2,981 from 3,715.
The result was its wage bill reducing by £13m for the year, which will help with cost-savings, while it shelled out £5.2m in redundancy payments.
“We continue to take actions to deliver on our goal of bringing the entire group back to profitable growth,” Lyttle said, noting the launch of a distribution centre in the US and an automation project in Sheffield.
The group hired ex-Betfair and Zoopla CFO Stephen Morana in Febuary after the incumbent Shau McCabe quit.
“We have a highly loyal customer base and throughout the year we remained focused on maintaining our position as an industry leading, fashion-forward group with brands that deliver on-trend, high quality fashion at great value prices. The strength and diversity across our core brands means the Group is well placed to serve a global customer base across fashion, beauty and home,” Lyttle said.
“The group is now well positioned to return to growth, and we are focused on ensuring that growth is both sustainable and profitable. We will host a capital markets day in due course to provide more detail on our strategy, key growth drivers and the longer-term outlook for the Group,” Lyttle continued.