Boohoo.com says it has recovered from a shock profit warning in January after online shoppers bought 70s-style items such as flared jeans and crocheted dresses.
For the year to 28 February, Boohoo’s revenue rose 27% to £139.9m from a year earlier. Earnings before interest, tax, interest and other items increased to £14.1m from £12.2m. Both figures were in line with guidance it published after its profit warning.
Boohoo stunned investors in January when it said a marketing push failed to overcome warm weather that subdued sales of autumn clothes in the last two months of 2014. Only 10 months after floating on the stock market, it cut its estimate for annual sales to about £140m from £157m and reduced its earnings forecast by 26% to £14m.
Neil Catto, Boohoo’s finance director, said: “It was a very unusual series of events in the last half of the year. We feel we are back on track now and seeing the response to our marketing campaign that we would expect and we wouldn’t expect that series of events to recur.”
The online fashion store said increased marketing spending had got it off to a good start in the current financial year. Boohoo’s “we are us” campaign features the song King, the number one single by the electronica group Years & Years.
Carol Kane, Boohoo’s joint chief executive, said: “The ‘we are us’ campaign has got momentum back in the business in terms of driving business and driving sales.” She said denim was selling strongly with A-line skirts and floppy sunhats bolstering the 70s trend.
The company has revamped its website and expanded its warehouse and is prepared for the busy summer months, Catto said.
Boohoo floated on the stock market in March 2014 at 50p a share amid feverish demand for online retailers. But its shares have not recovered from January’s warning and remain well below their flotation price. The shares fell 1% to 27.7p by late morning on Wednesday.
Analysts at stockbroker N+1 Singer said: “Today’s results in absolute terms are disappointing when compared to forecasts from six months ago. However, they are fractionally better than revised market forecasts and the key development projects were completed on time and to budget.”
Catto said he was comfortable with analysts’ forecasts for revenues of about £175m this year.
