British fashion giant Boohoo Group has reported an 11 percent drop in sales in the important Christmas trading period, which it said was in line with expectation.
Group sales came in at 637.7 million pounds for the four months to December 31, down from the 714.5 million pounds it reported a year earlier. Compared to FY20 levels, however, sales were up 35 percent.
Breaking it down by geography, sales in its home market of the UK dropped 11 percent year-on-year, in the rest of Europe were down 8 percent, in the US were down 12 percent, and in the rest of the world were down 9 percent.
However, all geographies were above FY20 levels, except the rest of the world, which was still down 9 percent.
The group said its international business was impacted by extended delivery times compared to pre-pandemic levels which continued to affect its proposition.FY EBITDA still expected to meet target
Boohoo added that gross margin of 49.7 percent was broadly in line with expectations, and is expected to improve year-on-year in the fourth quarter with a reduction in markdown activity anticipated.
Looking at the full-year, the group said it expects revenue to be down around 12 percent year-on-year, but it still expects adjusted EBITDA to be in line with market expectations.
CEO John Lyttle told investors: “Performance in the period is in line with expectations and reflects the normalisation of the channel shift online over the last twelve months, but demonstrates the significant market share gains the group has made over the last three years.”
He said he expects cost inflation to moderate in the second half of the year while the demand outlook remains uncertain “due to macro-economic factors”.
“We have reduced inventory by 27 percent year on year and with this focus on careful inventory management, strong cost control and cash management, we will continue to drive operational and cost efficiency across the business,” he said.