Home Stock Boohoo's margins dented by higher freight and labour costs
imageStock Markets39 minutes ago (Sep 30, 2021 02:56AM ET)

(C) Reuters. A smartphone with the Boohoo logo displayed is seen on a keyboard in this illustration taken September 30, 2020. REUTERS/Dado Ruvic/Illustration

LONDON (Reuters) -British online fashion retailer Boohoo warned on Thursday that freight inflation in its supply chain and higher wages for its distribution centre workers would impact full year profit margins.

Boohoo, which sells clothing, shoes, accessories and beauty products aimed at 16 to 40-year olds, said full year 2021-22 adjusted EBITDA margins were now expected to be 9% to 9.5% versus its previous guidance of 9.5% to 10%.

The group also raised its guidance for full year capital expenditure to 275 million pounds ($376.2 million) from up to 250 million previously.

Boohoo made adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 85.1 million pounds in the six months to August 31, down 5% from a year earlier, reflecting a rise of 26 million pounds in freight and logistics.

First-half sales rose 20% to 975.9 million pounds and are forecast to rise 20% to 25% over the full year, implying growth of 20% to 30% in the second half.

Boohoo said consumer demand had improved through both August and September.

The group also said it would open a new distribution centre in North America in 2023.

($1 = 0.7311 pounds)

Boohoo’s margins dented by higher freight and labour costs

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Boohoo’s margins dented by higher freight and labour costs

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