Online fashion giant Boohoo’s sales rise but profits fall
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The online fast-fashion giant said that its first-half pre-tax profits had been hammered by higher shipping charges. It has also seen the volume of items returned returning to normal after dipping during the pandemic. The owner of its eponymous brand, PrettyLittleThing, Nasty Gal, Karen Millen and Coast has had to integrate its Arcadia and Debenhams acquisitions.
It boosted its marketing spending to revitalise the fallen high street icons.
In addition, Boohoo had to pay new duties on some items with a £129-plus price tag and for extra checks at customs following Brexit.
And its profits were dented by the cost of purchasing two new warehouses.
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Although its revenues were only up 20 percent versus the same period last year, they are 73 percent higher than they were pre-pandemic.
On the other hand, the £24.6million profit it registered for the six months to August 31 was 46 percent lower than they were in 2019.
However, chief executive John Lyttle was bullish after investing heavily in the business in the first half. He claimed Boohoo is poised for an upturn in performance in the rest of the year.
Mr Lyttle said: “The group is well-positioned to accelerate its growth and our confidence in our medium-term targets remain unchanged.
“We will continue to invest across our platform, people and technology as we look to further cement our position as a leader in global fashion e-commerce.”
Boohoo did warn that increased freight costs and wage rises in its distribution centres will carry on into the second half of its financial year.
Elsewhere, H&M said its third-quarter profits were up 158 percent to £397million due to the easing of Covid rules and people returning to its stores.
It was also helped by strong online sales, cost control and fewer discounts. Net sales rose 14 percent to £4.7billion.
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