Revenues at company firm fell 10% in the six months to August to £882 million, with a similar decline in sales expected in the next six months, the firm said.
It forecast an earnings margin of between 3% and 5%, down from previous forecasts of between 4% and 7%.
Josh Holmes, Senior Consultant at Retail Economics said: “These results confirm that all is not well at the retailer. There’s no doubt about it, they are navigating through particularly challenging times with the business model under pressure.“Following a pandemic-fuelled boom, many shopper habits have snapped back into place more forcefully than had been expected. Rising returns and weaker demand have collided with spiralling input and operating costs, which has hit profitability hard.
Boohoo has begun cancelling orders from suppliers amid falling demand for clothes, the Sunday Times reported earlier this week. “As is the case across a retail sector navigating uncertain demand, we are constantly reviewing our requirements,” a company spokesperson said.
The retailer’s ‘Ready for the Future’ range is being investigated by the Competition and Markets Authority on whether its environmentally sustainable claims are inflated. Boohoo said it was “committed to providing its customers with accurate information on the products they buy.” It comes little more than a year after the firm faced a potential export ban to the US after border protections authorities said they would investigate claims of forced labour in Boohoo’s supply chain.
Boohoo boss John Lyttle said: “Performance in the first half was impacted by a more challenging economic backdrop weighing on consumer demand.
“We have a clear plan in place to improve future profitability and financial performance through self-help via the delivery of key projects, which will stand us in good stead as macro-economic headwinds ease.”
The beleaguered retailer’s declining share price has seen the wealth of founder Mahmud Kamani fall over £500 million in the past two years, while Boohoo shares are now the most shorted in the UK, according to insights from Research Tree.