Boohoo share price dips even as retailer posts revenue surge

Boohoo’s (LON:BOO) share price has fallen into negative territory this Wednesday even as the online retailer posted a rise in revenue and profits for the first half of its financial year. The update comes after the company recently lifted its full-year growth forecast, saying that its performance in the first half of the year had “been ahead of expectations with strong revenue growth driving operating leverage across key brands”.

As of 10:27 BST, Boohoo’s share price had given up 0.60 percent to 264.20p. The group’s shares have added just under 40 percent to their value over the past year.

Boohoo posts trading update

Boohoo announced in a statement this morning that its revenue had surged 43 percent to £564.9 million in the six months ended August 31, while its gross profit came in 40 percent higher at £306.5 million. Adjusted EBITDA meanwhile rose 53 percent to £60.7 million.

“It has been a fantastic first half of the year for the group. We have delivered significant market share gains across all of our key markets, and for the first time in our history, revenue has exceeded £1 billion in the last 12 months,” the group’s chief executive John Lyttle commented in the statement.

Going forward, Boohoo reiterated its expectations for revenue growth for the year to 29 February 2020 of between 33 percent and 38 percent, with adjusted EBITDA margin for the financial year to remain at around 10 percent. The company further reaffirmed its expectations for mid-term revenue growth of at least 25 percent per annum and adjusted EBITDA margin of around 10 percent.

Analysts on online retailer

Liberum Capital and Shore Capital both reaffirmed the online retailer as a ‘buy’ today, without specifying targets on the Boohoo share price. According to MarketBeat, the London-listed company currently has a consensus ‘buy’ rating and an average valuation of 278.18p.