Boohoo.com reports another sales surge, UK, US and Europe all soaring
The active acquisition strategy of trend-led affordable fashion e-tailer Boohoo.com is keeping it in the news at the moment but on Tuesday it was making headlines for its existing business rather than its new buys. And how did that existing business do late last year? The same as ever: sales soared.
In the four months to December 31, revenue was up an impressive 55% (or 52% at constant exchange rates) with the domestic UK market leaping ahead by 31% and the rest of Europe sprinting at an even better 63% (or 54% CER). Could the US business top that? Yes. It rose 230% (188% CER), while the rest of the world rose 66% (57% CER).
The only slightly bad news was that the gross margin, at 53.1%, was down 260bps with the retail gross margin down by the same amount at 54.4%. But that fall was the result of planned investment in price and promotions.
The company said its growth was driven by a broader product range that included the launch of its kidswear offer and that it had 5.1m active customers, a 31% year-on-year rise.
Boohoo also said trading was strong across all regions, a fact that the above figures made all too clear. And it added that sales momentum in the US has continued robustly, helped by its Black Friday weekend activity.
As a result of the pre-Christmas sales boom, the company now expects revenue growth, excluding recent acquisition PrettyLittleThing, to be between 43% and 45% for the full year that ends on February 28. This is above earlier guidance of a 38% to 42% rise.
With PrettyLittleThing already known to be on target for revenue growth of over 150% in the period and broadly break-even as far as operating profits are concerned, the combined group now expects revenue growth of 46% to 48% and an EBITDA margin of 11% to 12%.
It will be interesting to see how the proposed acquisition of Nasty Gal - if it goes through - might affect those figures. In the year to last February, the failed business made a net loss of $21m on revenue of $77.1m and the year since then clearly hasn’t improved the picture.
But Boohoo has shown that it knows how to make a business work and if Nasty Gal can enhance Boohoo’s US operations still further then the prospects are good.
The company is already gearing up for another sales boom this year with progress being made towards a further warehouse extension at Burnley in Northern England to support growth in the longer term and continuing investment in its IT infrastructure. Its US website was moved to a new platform in October and its mobile apps in the UK and internationally continue to grow in popularity.
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