By Dhirendra Tripathi
Investing.com – Boohoo stock (LON:BOOH) slumped by almost 12% in London Thursday after the U.K.-based fast-fashion company sprang a surprise by revising its annual guidance lower.
The company behind young women-focused brand Nasty Gal is known to set stiff targets for itself and also meet them.
Boohoo blamed pandemic-related challenges and higher shipping and wage costs for its decision.
It now expects full-year sales to grow 20%-25% compared to the 25% growth it so far anticipated. Adjusted EBITDA margins are seen at 9.25% at the midpoint of the guidance range, compared to an earlier estimate of 9.75%.
In the six months ended August 31, Boohoo’s revenue rose 20% on-year to 975.9 million pounds ($1.30 billion). Gross margin eroded by 40 basis points to 54.6% as the company had to spend more on marketing and shipping to overcome pandemic-induced tightness in the freight market.
The company said consumer demand, which improved through August, was keeping its momentum in September as well.
Boohoo’s results compare to 9% growth in third-quarter sales at much-bigger rival H&M (ST:HMb). The Swedish retailing giant benefited from straddling both online and offline platforms. Online sales rose 22%.
H&M said the new autumn collections have been well received and September sales were better than previous year but also warned that it was being held back by supply chain challenges.
Nasty Gal Owner Boohoo Plunges After Rare Cut in Guidance
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