Boohoo Group, the London-listed online fashion retailer, announced that it has downgraded its fiscal 2024 revenue targets due to a slower recovery in sales volume than originally anticipated. As a result, the company expects its revenue for the year ending February 28 to decline by 12% to 17%, a significant deviation from their previous guidance of flat growth or a slight decrease of up to 5%.
Despite this revenue setback, Boohoo Group remains confident in their adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, which they anticipate will be between 4% and 4.5%. This projection is based on the progress they have made in improving their gross margin and implementing cost controls.
While sticking to their adjusted EBITDA target range of £58 million to £70 million ($70.1 million to $84.6 million), Boohoo Group plans to allocate around £75 million to capital expenditure. However, the company did report a widened pretax loss of £26.4 million for the six months ending August 31, compared to a loss of £15.2 million during the same period last year.
The decline in revenue was driven by a 10% fall in core brand sales, which aligns with their strategic focus on pursuing more profitable sales opportunities. U.K. sales saw a 19% decrease, while international sales experienced a 15% drop.
Despite these challenges, Boohoo Group remains optimistic about their medium-term prospects and is committed to addressing their key priorities to improve profitability and restore growth. Chief Executive John Lyttle expressed confidence in their ability to achieve these goals.