boohoo sees strong growth in UK, US but other countries lag

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boohoo Group PLC (LON:BOO) has posted strong group revenue growth in the first quarter but good performance in the UK and the US was offset by dips elsewhere.

In the three months to 31 May, revenue climbed 32% to £486mln, a 91% jump compared to the same period in 2019.

READ: Boohoo too cheap for ESG concerns, says JP Morgan

The UK and US, its key markets, surged 50% and 43% respectively, while the rest of Europe and rest of the world slipped 14% and 15% respectively. Net cash at the end of the period was £199mln.

The online retailer kept full-year guidance unchanged and expressed confidence in its medium-term prospects underpinned by its expansion plans.

The AIM-listed giant integrated the Dorothy Perkins, Wallis and Burton brands and launched the new Debenhams digital department store, with fashion, beauty and homewares after acquiring all of them from administration.

Its distribution centre in Wellingborough is now live and the Daventry site is on schedule for operational use in the second quarter, which is expected to bring “significant job creation”.

The fast-fashion designer said it continues to make progress with its sustainability programme, after publishing in March its full UK manufacturing list with a commitment to publish its global supplier list in September of this year, and continues to review its entire manufacturing supplier base.

It has launched a new sustainability strategy called ‘UP.FRONT’, which contains a set of measurable targets, and joined the WRAP’s Textiles 2030 initiative with other clothing brands.

It will also transition to the Fast Forward forensic auditing model over the next twelve months.

“The group has demonstrated that it has taken the recommendations of the Review extremely seriously and has expanded its determination to develop and demonstrate a ‘gold standard’ in relation to the supply chain to all aspects of ethical, transparent and sustainable business practice,” said Brian Leveson, who is overseeing the programme.

“All those to whom I have spoken have demonstrated real enthusiasm for the Agenda for Change and pride in what it seeks to achieve. The progress and commitment are evident and has been the subject of positive comment from a number of those interested and engaged in the problems that Leicester has evidenced.”

Analysts at Peel Hunt said they expected guidance to remain unchanged at this early stage, though boohoo is running ahead of it.

“Interestingly, boohoo has seen dresses mix move from 12% to 30% of sales over recent weeks (which is higher than pre-pandemic), giving us confidence in the view that there will be a strong apparel trade back in normality for consumers,” they noted.

“Performance should be more weighted to the second half, and we note that comparatives remain particularly tough over the second quarter.”

Shares added 1% to 330.65p on Tuesday morning.

–Adds analyst comment, shares–

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