Boohoo: Revenue Drops 17% Amid ‘Challenging Market Backdrop’

Online fashion retailer Boohoo (LON: BOO) reported its full-year results for the 12 months ended February 29 on Wednesday, marked by a significant 17% decline in revenue compared to the previous year, reflecting the hurdles posed by general market conditions.

Revenue tumbled to £1.46 billion from £1.77 billion in 2023. Similarly, Gross Merchandise Value (GMV) witnessed a 13% decline, standing at £1.80 billion compared to £2.08 billion in the preceding year, a 13% fall. 

The fiscal year also saw Boohoo's adjusted EBITDA dip to £58.6 million from £63.3 million, a 7% decrease year-on-year. That was also at the lower end of its guidance of £58 to £70 million. 

Furthermore, adjusted loss before tax widened to £31 million from a comparatively modest loss of £1.6 million in the previous fiscal term, marking a 29.4% decrease.

The company noted that the challenging macroeconomic environment and marketplace growth, with its commission-only revenue model, impacted its revenue and GMV.

Boohoo's inventory has increased by £29.9 million compared to the previous year, driven by the investment in stock levels to support the opening of its US Distribution centre.

Despite the financial downturn, Boohoo remains optimistic about future prospects and remains confident in its 6% to 8% medium-term EBITDA margin target.

The company remains on track to deliver annualised cost savings of £125 million in FY25, while it expects a significant capital expenditure reduction in FY25. Boohoo also anticipates generating positive free cash flow in FY25.

“Despite difficult market conditions, caused by high levels of inflation and weakened consumer demand, we made continued progress in the year,” said John Lyttle, Boohoo's CEO. “We continue to take actions to deliver on our goal of bringing the entire group back to profitable growth.”