• Home
  • News
  • Business
  • Boohoo.com: investors cheer the 27 percent FY revenue spike after profit warning

Boohoo.com: investors cheer the 27 percent FY revenue spike after profit warning

By Angela Gonzalez-Rodriguez

loading...

Scroll down to read more

Business |ANALYSIS

Boohoo.com Plc. (BOO.L) Wednesday said full-year revenue increased 27 percent, sending the stock 7 percent up in early trading on the London Stock Exchange. The stock edged up by 5.2 percent to a 26.56 pence close price.

"We continue to build our business for the long term, as we stated at our IPO last year, and our clear objective is to deliver sustainable growth. We remain absolutely focused on execution and are increasing our marketing spend in FY16 to drive momentum in the business," joint Chief Executives Mahmud Kamani and Carol Kane said commenting the results.

Likewise, revenue for the two months ended November, 28 climbed 22 percent to 21.86 million pounds from 17.87 million pounds in the prior year. The growth was 24 percent in constant currency, as specified the company.

The Rest of Europe continued to perform strongly during the period, with 46 percent constant currency growth.

Wednesday, shares in online retailer Boohoo were back in fashion after it reported a 27 percent surge in full year revenue. However, despite gaining a 7 percent in early trading, the stock remain well below last year's initial public offering price, or 50 pence per share, highlights ‘This is Money’.

Mobile sales boost online visits over the period

The company, which targets 18 to 24-year olds, said it was helped by mobile which accounted for almost 50 percent of website visits, and it also launched new lines Boohoo Petite and Boohoo Fit during the period.

In this vein, Boohoo.com CEOs highlighted that mobile conversion had improved by more than 40 percent in the last quarter of the year. During the year the company invested in warehouse infrastructure, installing a warehouse management system and extending its warehouse, scheduled for completion in April.

“We continue to build our business for the long term, as we stated at our IPO last year, and our clear objective is to deliver sustainable growth,” said the company’s joint chief executives in a statement.

Boohoo said revenue rose 24 percent on a constant currency basis to 21.9 million pounds in the two months to February 28, lifting full-year up to 139.9 million dollars, or a rise of 31 percent.

It is worth to remember that the etailer saw its shares dive by 40 percent in January, due to a profit warning for its full-year results, amid heavy discounting and as unseasonably warm weather kept shoppers off the high street, recalled Reuters.

"We remain absolutely focused on execution and are increasing our marketing spend in 2015-16 to drive momentum in the business," said joint chief executives Mahmud Kamani and Carol Kane.

The company also said it would seek to buy back shares from the ordinary market at its next investor meeting.

"The board has considered the levels of cash in the business and will be seeking authorisation to buy back up to 10 per cent of issued share capital to be approved at the next AGM," it said in a statement to the London Stock Exchange.

Barclays lowered Boohoo.Com PLC (LON:BOO) to an equal weight rating in a research report released on Wednesday morning. Barclays currently has a 25 pence price objective on the stock, noticeably lower than the 37.50 pence price target set by Investec.

Boohoo