Boohoo share price: Company warns on full-year profit

on Jan 7, 2015
Listen, Wednesday, January 8: (LON:BOO) has this morning warned on full-year profits. The company’s shares have opened more than 40 percent lower in London.

**Highlights from Boohoo’s statement:**
We announced in our interim results statement in mid-October that we had managed our marketing spend and growth in the early part of this period, whilst also delivering the successful implementation of the new warehouse management system and fully responsive website. Marketing was then increased to stimulate sales, however, the resultant growth was less than anticipated. We believe this was principally due to heavy promotional activity on the UK high street arising from the warm autumn season.

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Despite the challenging high street trading environment, we had a record week over “Black Friday”. The investment made in the warehouse and IT enabled us to execute on handling this peak in gross demand which was 2.4 times our previous busiest day whilst maintaining our promise to the customer.

Our international pricing initiatives produced encouraging results with constant currency growth of 20% in Australia and 41% in the US. Within the 41% constant currency growth achieved in the Rest of Europe, France was particularly strong.

In light of the prevailing sales momentum in the business, we expect the full year results to be below current market expectations. We now anticipate growth for the second half as a whole to be in line with the 25% growth for the four month period to 31 December 2014. As a result we also expect the EBITDA margin for the full year to be in line with the first half at approximately 10%.

Joint Chief Executives Mahmud Kamani and Carol Kane said “Whilst the period proved a challenging trading environment, we have still grown the business by 25%, albeit short of our previous expectations. We are very confident that our fashion credentials, pure play online model and the significant investment in infrastructure will continue to drive growth in the UK and internationally.”
**More to follow…**


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