MANCHESTER, United Kingdom — British online fashion retailer Boohoo lifted its full-year guidance after reporting robust Christmas sales on Tuesday, outperforming rivals and overcoming weak UK consumer spending.
Boohoo, which sells own-brand clothing, shoes, accessories and beauty products targeted at 16 to 40-year-olds, reported a 44 percent jump in total group revenue for the four months to December 31 of £473.7 million ($614.6 million).
Revenue growth was ahead of analysts' expectations, and first half growth of 43 percent, and Boohoo shares were up 5 percent by 09:15 am GMT.
The retailer is successfully tapping into a generation of younger consumers who shop on their mobile phones and want cheap clothing, delivered quickly.
Founded in Manchester, northern England, in 2006 Boohoo has expanded rapidly, listing its shares in 2014. They have risen 71 percent over the last year, giving the AIM-listed group a market capitalisation of 3.9 billion pounds — more than the 136 year-old Marks & Spencer's.
Boohoo bought the PrettyLittleThing and Nasty Gal brands in 2017 and MissPap, Karen Millen and Coast in 2019.
The company has also utilised high-profile celebrity collaborations promoted on social media, such as with model and actress Cara Delevingne and pop group Little Mix.
Boohoo saw strong revenue growth across all its key geographic regions in the September-December period. Sales of the Boohoo brand rose 42 percent, with PrettyLittleThing up 32 percent and Nasty Gal up 102 percent.
"All of our brands have performed exceptionally well and delivered strong market share gains," Chief Executive John Lyttle said in a statement.
The group is now forecasting full year 2019-20 revenue growth of 40-42 percent, up from previous guidance of 33-38 percent, and a core profit margin (adjusted EBITDA margin) of 10.0-10.2 percent, versus previous guidance of "around 10 percent".
While Boohoo is thriving, Britain's wider retail sector, from department stores to fashion brands, is battling some of the toughest trading conditions seen for a generation.
Industry data published on Thursday showed British shoppers cut back at the end of 2019, rounding off the worst year since the mid-1990s for retail sales amid uncertainty over Brexit, last month's national election and slowing wage growth.
Also last week fashion retailers Superdry and Joules issued profit warnings, while M&S reported weak menswear sales.
Prior to Tuesday's update analysts were on average forecasting for Boohoo's 2019-20 year core earnings (earnings before interest, tax, depreciation and amortisation - EBITDA) of 116.1 million pounds, according to Refinitiv data, up from £84.5 million in 2018-19.
Analysts at Liberum said the update implied upgrades of about 8 percent.
"Boohoo’s business model and operational execution is delivering best-in-class growth and earnings momentum," they said, noting they have already upgraded their EBITDA forecast by 22 percent over the last year.
By James Davey; editors: Paul Sandle and Susan Fenton