Business

Boohoo warns profits will be affected by returns and shipping costs

Fast-fashion retailer Boohoo has warned that sales growth and profit margins will be lower than expected this year, due to higher rates of returned items and the pandemic of supply chain bottlenecks. increase costs.

The Manchester-based online group expects net revenue growth of 12 to 14 per cent, down from its previous guidance of 20 to 25 per cent, for the year ending February 2022. of this group fell 20% in early London trading on Thursday.

The company also expects a profit margin at adjusted earnings before interest, taxes, depreciation and amortization of 6 to 7%, down from its previous forecast of 9 to 9.5%, due to cost Shipping and return costs are high due to the global supply chain tightening under the impact of the pandemic. That would put adjusted ebitda this year between £117m and £139m.

The group said it remains confident it can maintain its target of a medium-term margin on ebitda of 10%, as this year’s pandemic-related costs drop.

The company warned investors about profit margins in September. Boohoo shares are down 59.5% this year.

“The group has gained significant market share during the pandemic. The current headwinds are short-term and we expect them to ease as pandemic-related disruptions begin to ease,” said chief executive John Lyttle.

While Boohoo’s sales in its home market of Britain have improved, sales in the US and elsewhere have declined in recent months.

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