Sales dip at fashion giants

Fashion giants Boohoo and N Brown are sticking to their guidance for the current year despite acknowledging a softening in consumer demand.

The retailers say they are managing the impact of inflation and the cost of living crisis, and have not changed their forecasts for their own financial performance.

But both Manchester-based groups this morning announced a drop in quarterly revenues.

The quarterly sales update did overlap with a comparative period that included some lockdown of stores, which N Brown reminded had “provided a tailwind to online retail demand”.

Boohoo’s first-quarter sales, for the three months to May, showed an 8% fall in sales to £445.7m. However the retailer highlighted this was still 75% higher than the pre-pandemic financial year three years ago.

Boohoo still expects revenue growth for the full financial year to be “low-single digits”, with a return to growth in Q2 and growth rates improving in the second half of the year as the group annualises high returns rates and normalising consumer demand.

Boohoo’s chief executive John Lyttle said: “I am pleased with the progress we are making towards our strategic priorities, which is already having a meaningful impact operationally within the business.

“We have seen promising signs from the group’s sales performance in the UK, which has improved month-on-month in the period and we are looking ahead towards our key summer trading season as holidays ramp up and customers look to the latest fashion from across our brands.”

N Brown’s first quarter saw a 2% drop in revenue, to £165.1m, although income from its financial services arm suffered a bigger hit than product.

N Brown’s chief executive Steve Johnson said: “Sales volumes since the start of the financial year have been softer, reflecting various well-documented pressures on consumer confidence, which are showing no signs of abating in the short term.

“As these pressures persist, we expect the trading environment to remain challenging and will, therefore, continue to take actions to mitigate the effects wherever possible.”