// Boohoo full-year profits nosedived 94% on a pre-tax basis or 28% on an adjusted EBITDA level
// Growth was hit by higher returns rates, lockdowns subduing demand and longer delivery times
Boohoo’s full-year profits have plunged as international sales went backwards during the year.
The online fashion retailer said profits were hit by lower than anticipated growth and significantly increased logistics costs.
On a pre-tax level, profits nosedived 94% year on year to £7.8 million in the year to 28 February. On an adjusted EBITDA basis, profits dropped 28% to £125 million, which the retailer pointed out was broadly flat on two years ago, pre-pandemic.
Sales rose 14% on last year as Boohoo neared £2 billion turnover, which is up 61% on pre-pandemic levels.
In the UK, where Boohoo said it had “significantly increased” its market share since 2020, sales jumped 27% year on year. The retailer said its product, price and proposition were resonating with customers.
However, international sales dipped 3% over the year.
Boohoo said three factors had stymied growth – higher returns rates, lockdowns in key markets hitting demand, and long delivery times hitting demand.
The retailer said it had increased its warehousing and distribution capacity so it could support over £4 billion of sales.
It plans to automate its Sheffield warehouse in the current financial year, which it said would drive “material efficiencies”. It will also open a new distribution centre in the US next year. This is part of what Boohoo said was “record investments” over the year. It invested £261.5 million over the year.
Boohoo group chief executive John Lyttle said: “Our focus over the past two years has been on investing to build a strong platform, with the right infrastructure, supported by increased capacity to better serve our customers.
“In the year ahead we are focussed on optimising our operations through increasing flexibility within our supply chain, landing key efficiency projects and progressing strategic initiatives such as wholesale and our US distribution centre. This will ensure that the group is well-positioned to rebound strongly as pandemic-related headwinds ease.”