Boohoo reports its interim results this Tuesday but has previously highlighted expected sales declines for the first half of the year of between 10% and 15%.
Boohoo’s results are expected to follow in the footsteps of ASOS, who reported a 12% decline in group revenue last week as its product offering struggles to resonate with consumers during the cost-of-living crisis. However, Boohoo is unlikely to face that issue as its cheaper price points resonate better with consumers, especially its younger target audience.
But a return to in-store shopping has impacted online pure-plays who benefitted from the lockdown measures just a few years ago. Additionally, Boohoo’s introduction of return fees on its brands may have caused loyal consumers to rethink their purchases and even possibly deter them.
Boohoo’s revenue fell 11% for the year ending 28 February, and higher margin costs have caused a pre-tax loss of £90.7m. This has contributed to its share price falling 45% over the last six months.
Investors will, however, keep an eye on the impact of Boohoo’s new US warehouse as it looks to recover in the country, which was the worst-performing region in its last financial year.
By Jamel Boughedda