Boohoo Group PLC (LON:BOO) has said group sales during April are ahead of last year, recovering after an initial plunge in mid-March when the coronavirus pandemic spread across Europe.
The online fashion retailer has dropped guidance for the year to February 28, 2021, but said it has enough headroom thanks to its variable cost base, low cash burn rate and “strong” balance sheet.
Posting full-year results, the fast-fashion brand said it continues to operate with tightened safety measures at its warehouses and has set up an emergency fund to help suppliers, who are being paid as normal.
The AIM-listed firm did not provide any financial details on how it is coping with the crisis.
In the year ended February 29, 2020, Boohoo's revenue jumped by 44% to £1.2bn, with pre-tax profit up 54% to £92mln. The group had net cash of £240mln at the year-end.
Boohoo boosted its market share in the year by acquiring three new brands - MissPap, Karen Millen and Coast.
A dividend was not recommended again to save cash for capital expenditure, the group said.
Analysts at Liberum reinstated the 'buy' recommendation and the 330p target price, which were under review, based on the "healthy" financial position.
"We still assume sales fall by 33% during April to June, with a steady recovery to regular levels of sales by September 2020," they commented.
"We assume a significant build-up of inventory in late July and August for Autumn/Winter season requiring purchases of over £170mln during the period."
"The existing liquidity and return to normal sales pattern from August-September should enable the company to pay for this working capital on time."
Shares advanced 6% to 287.34p on Wednesday morning.
--Adds analyst's comment, shares--