Boohoo (BOO) cuts through dark clouds of troubled retail sector

Sales expected to rise even further as revenue growth beats predictions.

Article updated: 5 September 2019 11:00am Author: Graham Spooner

  • Trading is ahead of expectations and group expects full-year revenue to rise between 33% and 38%.
  • Shares rise 15% in early trading, taking them to an all-time high.
  • Shares remain the only retailer we’ve been positive on and outlook remains unchanged over the medium term.

Following the latest news of M&S crashing out of the FTSE100, this morning’s update from the fast fashion retailer could reignite a measure of investor confidence in the retail sector. The group reported sales were now expected to rise by between 33 – 38%, up from the previous guidance of 25 – 30%. It continues to go from strength to strength and now commands a greater market value than its AIM listed rival ASOS.

The short trading update highlights revenue growth performance to have been ahead of expectations; however this will not come through to improved earnings margins with guidance remaining the same at around 10% as a result of investing in acquired brands.

Our view on Boohoo - Buy

The market has reacted positively to the update from the AIM listed group, with shares rising 15% in early morning trading, which moves them to a new all-time high and are up 65% year to date. Boohoo remains the only retailer we’ve been positive on and we feel that the shares could remain a ‘pretty little thing’ over the medium-term.

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All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.

Graham Spooner portrait photo
Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.