Boohoo posts drop in full year profits
Boohoo has posted a decline in full year profits following lower than anticipated growth.
In the year to 28 February, sales increased by 14% to £2 billion and by 61% on two years ago.
However, adjusted EBITDA dropped by 28% to £125.1 million year-on-year, but was broadly flat against two years ago. Meanwhile pre-tax profit fell to £7.8 million from £124.7 million last year.
Boohoo said growth was impacted by a significant increase in returns rates in its second half, subdued consumer demand as a result of lockdowns in key markets, and international sales being hit by extended delivery times.
The retailer also experienced a significant increase in outbound carriage costs due to a lack of airfreight capacity and inbound shipping costs rising equally steeply.
During the year, Boohoo invested in rebuilding and relaunching four new brands and extended its distribution network through the opening of two new facilities. In addition, it will be launching a distribution centre in the US as part of plans to transform the customer proposition.
John Lyttle, Boohoo Group chief executive, said: “Over the past two years, we have significantly increased market share in our core geographies of the UK and the US, and we have grown active customer numbers by 43% across the group to 20 million. Our focus over the past two years has been on investing to build a strong platform, with the right infrastructure, supported by increased capacity to better serve our customers.
“In the year ahead we are focussed on optimising our operations through increasing flexibility within our supply chain, landing key efficiency projects and progressing strategic initiatives such as wholesale and our US distribution centre. This will ensure that the group is well-positioned to rebound strongly as pandemic-related headwinds ease.”
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