UK's Boohoo Group's revenue falls 15% YoY to $799.5 mn in H1 FY25

The operating costs were reduced by 17.8 per cent YoY to reach £294.3 million, yet adjusted EBITDA declined by £10.5 million to £20.8 million (~$26.42 million), with its share of revenue narrowing by 90 basis points to 3.4 per cent YoY, said Boohoo in a press release.

The gross Merchandise Value (GMV) of the company pre-returns decreased by 7.3 per cent YoY to reach £1,176.9 million, while GMV post-returns dropped by 6.2 per cent to £807.8 million. The adjusted EBIT recorded a deeper loss of £18.3 million, equating to -3.0 per cent of revenue, while the adjusted loss before tax widened significantly to £27.4 million.

Adjusted diluted loss per share also increased to -1.96 pence. Net debt rose sharply to £143.1 million from £35.0 million, and capital expenditure was reduced by £21.4 million to £14.9 million.

Operating costs of the company were down £128 million vs H1 FY23, ahead of target, showing the impact of cost saving programme and the company’s continued focus on costs. Adjusted EBITDA margin was 3.4 per cent, down 90 bps vs H1 FY24, due to reduction in gross margin, offset by cost reduction initiatives and value unlocked from automation investment. Adjusted EBITDA was £20.8 million, down 34 per cent vs H1 FY24.

Inventory reduced by £38.1 million (18 per cent) to £170 million in this period. The Youth Brands hold 75-80 per cent (approximately) of the group’s inventory, Karen Millen 5-10 per cent and the rest by Debenhams Group.

Capital expenditure of £14.9 million reduced from £36.3 million in the first half of the prior period and represents strategic investments in systems and infrastructure. The net debt of the company increased to £143.1 million (~$181.737 million), with total liquidity of £131.9 million.

During H1 FY25, the company took decision to close the US distribution centre and fulfil all US orders from its state-of-the-art automated UK distribution centre in Sheffield. The US distribution centre had a negative impact on EBITDA of 120 basis points (bps) in H1 FY25. EBITDA benefits of the warehouse closure are expected during the second half of H2 FY25, stated the release.

“The first half of FY25 has seen positives. We continue to see significant growth in Debenhams Marketplace and Beauty with YOY GMV growth of more than 170 per cent and more than 10,000 brands on boarded, already achieving our target for the end of 2024. As we look forward, I am excited for this next chapter and to deliver on our shared objective to unlock and maximise value for all shareholders. Today we are also announcing that we will host a capital markets day, which will take place in Q1 2025,” said Dan Finley, chief executive officer of Boohoo Group.

In the second half (H2) of FY25, the Group expects a higher GMV and a stronger adjusted EBITDA performance, when compared to H1 FY25, despite further investment into the brands to unlock shareholder value. It also expects strong continued marketplace growth, ongoing headwinds in Youth Brands, and benefits from historic cost actions to reduce cost base year on year.

Fibre2Fashion News Desk (SG)