Britain’s Boohoo to meet earnings guidance as sales growth slows

LONDON (Reuters) -British online fashion retailer Boohoo forecast 2021-22 core earnings in line with reduced guidance as it reported an expected slowdown in revenue growth in its latest quarter.

The Manchester, northern England, based group, which sells clothing, shoes, accessories and beauty products aimed at 16 to 40-year olds, had warned on annual profit in December, blaming a spike in product return rates, disruption to international deliveries and higher inbound freight costs.

Its shares have fallen 76% over the last year as it has also sought to improve its image following negative publicity over supply chain failings.

Boohoo said on Thursday it expected to report adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the year to Feb. 28 of about 125 million pounds ($165 million), down from 173.6 million pounds in 2020-21.

Boohoo said net sales growth in its fourth quarter was 7%, having been 10% in the third quarter.

“As expected, net sales growth in the quarter was impacted by higher returns rates year on year due to product mix. This is expected to continue in the first half of FY23,” it said.

It said while it continued to trade well in its home market, its international performance continued to be impacted by longer customer delivery times as a result of pandemic-related supply chain pressures.

“We are confident that pandemic-related headwinds are short-term in their nature, and our focus is to ensure the business is well positioned for growth as these headwinds ease,” said CEO John Lyttle.

Rival Zalando said last week it expected sales growth to slow in 2022.

Boohoo said last week it had suspended sales to Russia following its invasion of Ukraine. Sales into Russia total less than 0.1% of group revenues.

($1 = 0.7587 pounds)

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