Boohoo cites 'outstanding growth' as sales hit £1bn for first time

Edmund Heaphy
·Finance and news reporter
Updated
Sales at the online clothing retailer beat expectations, topping £1bn.
Sales at the online clothing retailer beat expectations, topping £1bn. Photo: Boohoo

Revenue at Boohoo (BOO.L) surged by 43% in the first half of its financial year, pushing sales figures at the online fashion retailer above £1bn in a year for the first time ever.

The company reported sales of £565m in the six months to the end of August, beating analyst expectations of £540m.

Before-tax profits, which surged 53% compared to the same period last year, also beat expectations, coming in at £60.7m.

“The group's performance over the half year has been outstanding, with strong momentum across the business driving impressive revenue growth in all our brands and in all key focus territories,” the company said on Wednesday.

Earlier this month, Boohoo raised its own full-year forecasts, saying it expected sales growth to come in between 33% and 38%. It made no adjustments on Wednesday.

The strong growth was seen in particular in its Nasty Gal and PrettyLittleThing divisions.

READ MORE: Cash payments now account for only 20% of UK spending

Revenue at Nasty Gal, a US fashion company acquired by Boohoo out of bankruptcy in 2017, climbed by a massive 148%.

The number of “active customers”, a key metric that Boohoo uses, were up 112% to 1.5 million in the six-month period.

Revenue at PrettyLittleThing, which is aimed at 14–24 year-old women, climbed by 41% to £237.6m, with Boohoo pointing to “outstanding market share and revenue growth in all markets.”

NEW YORK, NEW YORK - SEPTEMBER 11: Ceraadi performs at the boohoo NYFW celebration at the boohoo Mansion on September 11, 2019 in New York City. (Photo by Monica Schipper/Getty Images for boohoo)
Ceraadi performs at the boohoo NYFW celebration at the boohoo Mansion on September 11, 2019 in New York City. (Photo by Monica Schipper/Getty Images for boohoo)

The number of customers climbed 43% at PrettyLittleThing.

Gross margins in both divisions were down slightly, with Boohoo citing “refinements to the customer proposition” at Nasty Gal.

But other crucial metrics, such as average basket value, order frequency, and number of items in each basket, climbed across the company.

Shares in Boohoo, which reached an all-time high earlier in September, fell slightly on Wednesday.

READ MORE: Travel operator TUI says it's 'resilient' in wake of Thomas Cook collapse

The company, which is one of the more successful online retailers, spends significant sums on marketing and social media promotion.

In its most-recent financial year, it spent as much as £80m on celebrity endorsements and marketing costs.

The success of the retailer, which sells low-cost own-brand clothing, comes at a tough time for the high street. Sir Philip Green’s retail empire teetered on the edge of collapse earlier this year.

“We enter the second half of the year well-placed and confident that our platform, which combines the latest fashion, great prices and excellent customer service, all underpinned by a well-invested infrastructure, will deliver further market share gains,” said Boohoo CEO John Lyttle on Wednesday.