British online fashion retailer Boohoo on Wednesday cut its entire-year outlook, blaming a worsening macro-economic and consumer backdrop as it reported a 58% drop in first-half core earnings.
The group, whose shares have fallen 70% this year, said on Wednesday it now expected revenue to fall over the full 2022-23 year, with a core earnings margin between 3% and 5%. It was previously forecasting revenue growth in the “low single digits” and an EBITDA margin of 4% to 7%.
It said the lower margin forecast reflected increases in inflation-driven costs as well as the resultant operational deleverage from lower than anticipated sales.
The seller Boohoo, which sells clothing, shoes, accessories and beauty products aimed at 16 to 40-year olds, reported core earnings of 35.5 million pounds ($37.9 million) for the six months to Aug. 31, down from 85.1 million pounds a year earlier.
Revenue fell 10% to 882.4 million pounds, reflecting weaker than expected consumer demand, a significant increase in product returns and increased delivery times for products sold in foreign markets.
“As a result of the impact that the macro-economic and consumer backdrop has had on the group’s revenues in the first half, our expectation is for a similar rate of revenue drop to persist over the remainder of the financial year if these conditions continue,” Boohoo said.
Former this month online rival ASOS (LON:ASOS) warned on profit, as did retailer Primark which does not trade online.
($1 = 0.9358 pounds)