Impressive growth across the pond pushes revenues.
Boohoo defies subdued retail market with strong start to the year
- Online retailer reports 39% increase in revenue for first quarter.
- PrettyLittleThing brand goes from strength to strength with 42% rise in revenue.
- Company remains aware environmental concerns remain an issue for the sector, but we maintain our ‘Buy’ recommendation.
The online fashion retailer reported a strong start to its new financial year today with a 39% increase in revenue for the first three months. This exceeded expectations with the breakdown showing growth across the main markets with UK sales up 27% while the US reported an impressive 66% rise. The PrettyLittleThing brand continued to see good growth with a 42% rise in revenue. Boohoo maintained its full-year forecasts which include expectations of a 25 – 30% increase in revenue.
These are excellent figures, clearly demonstrating continued demand from consumers to buy clothing online rather than hitting the high street. Many others in the sector, including rival ASOS, would be delighted to achieve this level of growth. The shares responded with a modest 2% drop in early trading, possibly due to a rise in the last few days leading up to the figures. Environmental concerns about low-cost fashion clothing remain an issue for the sector, and Boohoo will need to put in further investment to maintain its growth, but we continue with our buy recommendation for investors seeking a medium to high level of risk.
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