Boohoo Group PLC (AIM:DEBS), the online fashion retailer that now trades as Debenhams, has said it expects a double-digit improvement in adjusted earnings for the current financial year as its multi-year turnaround strategy gathers pace.
The company said the guidance was underpinned by the continued shift toward its marketplace model.
Group gross merchandise value (GMV) returned to growth in the first quarter of the new financial year, up 0.5% year-on-year.
Trading in May was particularly strong, with GMV growth of approximately 8%, and the company said momentum had continued into June.
Net debt is targeted to fall below 1 times adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) by the end of the financial year.
Lease payments are expected to fall to approximately £13 million in the new financial year, before dropping further to around £6 million once the subletting of the group's US property lease completes.
Depreciation is forecast to decline from £46.3 million to approximately £20 million, while capital expenditure is expected to come in at around £8 million.
The group said the most significant phases of its restructuring were substantially complete, with exceptional costs expected to reduce materially.
Chief executive Dan Finley said the year ahead was expected to deliver further profit growth and sustained free cash flow generation.
The outlook follows a year in which the group reported adjusted EBITDA of £53.3 million, up 35% year-on-year and every brand within the group is now profitable.
The Debenhams brand was the standout performer, with GMV rising 11.6% to £730 million and adjusted EBITDA up 38.5% to £34.8 million.
PrettyLittleThing completed its turnaround, swinging from a £1 million loss to a £14 million adjusted EBITDA profit.
Group GMV before returns fell 21.6% to £1.82 billion as the company prioritised profitable sales over volume.
Net debt stood at £93.2 million at the year-end, representing leverage of 1.75 times adjusted EBITDA.
The retailer completed a £175 million financing facility in August 2025, extending debt maturity to August 2028.
It also raised £40 million through an oversubscribed equity placing in February 2026.
Finley said the business had been transformed since his appointment as chief executive in November 2024, with the cost base reset and warehouse operations consolidated into a single site in Sheffield.
He said the Debenhams brand's turnaround now provided the blueprint for the wider group's growth strategy.
