Britain’s Boohoo to meet profit forecast as sales growth slows

A woman poses with a smartphone showing the Boohoo app in front of the Boohoo logo displayed in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustration

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LONDON, March 10 (Reuters) – British online fashion retailer Boohoo (BOOH.L) is forecasting 2021-22 core profits on a reduced outlook as it reported an expected slowdown in revenue growth during of his last trimester.

The Manchester, northern England-based group, which sells clothes, shoes, accessories and beauty products aimed at 16 to 40-year-olds, had warned of annual profits in December, blaming a surge product return rates, disruption of international deliveries and increased inbound freight costs. Read more

Its shares have fallen 76% in the past year as it also sought to improve its image following negative publicity about supply chain failures.

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Boohoo said on Thursday it expected to report adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the year ending Feb. 28 of around 125 million pounds ($165 million), down from 173, £6m in 2020-21.

Boohoo said net sales growth in the fourth quarter was 7%, after being 10% in the third quarter.

“As expected, net sales growth in the quarter was impacted by higher year-over-year return rates due to the product mix. This is expected to continue in the first half of the fiscal year. 23,” he said.

It said that while it continued to trade well in its home market, its international performance continued to be affected by longer delivery times to customers due to pandemic-related supply chain pressures.

“We believe that the headwinds related to the pandemic are short-term in nature, and our goal is to ensure that the business is well positioned for growth as these headwinds subside,” said the CEO John Lyttle.

Rival Zalando (ZALG.DE) said last week that it expects sales growth to slow in 2022.

Boohoo said last week it had suspended sales to Russia following its invasion of Ukraine. Sales in Russia represent less than 0.1% of the group’s turnover.

($1 = 0.7587 pounds)

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Reporting by James Davey Editing by Alistair Smout and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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