Boohoo Group PLC (AIM:BOO) said return rates and the wider macro-economy continue to impact its financial performance as the online fashion retailer reported a fall in sales and profits.
In the six months to the end of August, adjusted profit before tax nosedived 90% to £6.2mln, as sales fell 10% to £882.4mln, with “return rates up significantly year-on-year”.
“Performance in the first half was impacted by a more challenging economic backdrop weighing on consumer demand,” said chief executive John Lyttle.
And the group expects revenues to decline at a similar rate for the rest of the year due to the macro-economy and consumer backdrop.
According to a statement, inflation-driven costs also mean adjusted underlying earnings (EBITDA) margins are now expected to be between 3% and 5%, down from 4% and 7%.
“We have a clear plan in place to improve future profitability and financial performance through self-help via the delivery of key projects, which will stand us in good stead as macro-economic headwinds ease,” Lyttle added.
Boohoo said it is focusing on sourcing, inventory management and overheads in the near term, which it believes will help improve profitability and financial performance.
In the post-period, its Sheffield distribution centre went live and is expected to drive down cost savings and efficiencies with a five-year estimated payback on £125mln of capital expenditure, it said.
On a three-year basis it has made notable progress towards its long-term ambition, with revenue up 54% since 2019, marketing increasing to 8.4% and active customers up to 19mln.