What a contrast. A day after its big rival ASOS PLC (LSE:ASC) lost around a fifth of its value on funding worries, Boohoo Group PLC (AIM:BOO) served up better-than-expected results, sending its shares 13% higher.
The news even prompted Shore Capital, the regional broker that has guru status in the world of online fashion, to move off the fence and upgrade its stock recommendation to ‘buy’.
“Despite a recent decline in Boohoo's market share, the upcoming fiscal year offers favourable year-on-year comparisons, along with a streamlined inventory and the phased launch of a US warehouse, which are expected to boost the company's prospects,” said Shore.
It puts the fair value of the shares at 54p. In early trade, the stock was changing hands for 43.40p, up 4.95p.
Earlier, Boohoo's prelims lifted investors' spirits by being not quite as bad as forecast - in other words, the bar was low, folks.
Adjusted earnings were down 49% at £63mln and revenues were off 11% at £1.77bn.
The cash generation element of the results was the bit that surprised on the upside, as the City's analysts like to say.
The net cash position as of February 28 was £6mln against forecasts that it would be carrying debt of around £60mln.
So, here’s the thing: While ASOS appears to be struggling to keep a lid on its indebtedness, Boohoo is having no such problems.