Boohoo Group PLC (AIM:BOO) has said it expects rising costs to moderate in the current year after it reported an 11% decline in group revenue for the four months to 31 December 2022, in line with previous guidance.
In a trading statement, the online fashion retailer said its UK revenues declined 11% year-on-year, versus a strong prior year comparative, while international revenues declined 10% year-on-year, with extended delivery times compared to pre-pandemic levels continuing to affect the company's proposition
However, the online fashion retailer noted positive signs in global supply chains and said it expects lower freight rates to provide “some easing of disruption.”
Combined with the actions being taken by the group, such as a reduction of capacity in its UK network, there is an improved outlook on cost inflation for the year ahead, it added.
“Looking ahead, whilst the demand outlook is uncertain due to macro-economic factors, cost inflation is expected to begin to moderate in the second half of the year,” Boohoo chief executive John Lyttle said in the trading statement,
The company said its performance for the full-year ending 28 February 2023 is expected to be in line with expectations, with an adjusted EBITDA margin of 3.5%, which is at the lower end of previous guidance between 3% and 5%.
In early trading on Thursday, Boohoo shares were down 5% at 44.97p.
Boohoo said its inventory levels have been significantly reduced, down 27%, thanks to improving speed and flexibility within its global supply base.
The company also said it has significant liquidity headroom, with more than £300mln of gross cash at the end of December 2022.