Boohoo quarterly results show sparkle

ONLINE fast fashion retailer boohoo.com has announced another strong quarterly performance, with year-on-year revenues shooting up 41%, boosted by third party sales in the UK.

The company’s turnover grew to £58.2m for the three months to May 31, (2015: £41.3m).

Retail gross margins were 57.6%, down 300 base points on last year year, which it said was down to planned investments in price and customer proposition. Its marketing expenditure reduced as a percentage of sales, to offset the retail margin decline.

The company, which specialises in the so-called ‘social generation’ – men and women under 25 – now has 4.2 million active customers, up 30% on last year.

Mahmud Kamani and Carol Kane, joint chief executives, said: “We are encouraged by our performance in the first quarter, with revenue growth in all geographic regions and slightly ahead of our expectations. Our international business continues to gather momentum and accounts for 36% of revenue.”

They added: “We continue to broaden our product range, increase our fashion appeal and offer incredible prices. Active customer numbers, order frequency, basket size and conversion continue to climb.

“We now expect sales growth for the financial year of between 25% and 30%.  We expect EBITDA margins in line with last year although we will look at opportunities to drive incremental growth by investing in the customer proposition and our international markets. We continue to execute on our strategy and refine our ecommerce platform to deliver a market-leading shopping experience for fashionable product at incredible prices.”

The company’s  warehouse expansion programme in Burnley continues with the fit-out of three additional mezzanine floors nearing completion and planning is underway for a new building on the adjacent site to meet our future capacity requirements.

Based on Dale Street in the city centre, boohoo.com has £61m cash on its balance sheet.