Online fashion retailer Boohoo sees shares slide 22% on profits warning  

Boohoo owns PrettyLittleThing, Warehouse, Oasis, Karen Millen, and Coast, as well as former Arcadia’s online brands of Burton, Dorothy Perkins, and Wallis.

British online fashion retailer Boohoo warned on annual profit for the second time in four months, blaming a spike in product return rates, disruption to international deliveries and higher inbound freight costs.

It said the new Omicron coronavirus variant could pose further demand uncertainty and elevated returns rates, particularly in January and February if purchased partywear is left unworn by cancelled social gatherings.

Shares in the group, which sells clothing, shoes, accessories and beauty products aimed at 16 to 40-year olds, slid by 22%.

Boohoo owns PrettyLittleThing, Warehouse, Oasis, Karen Millen, and Coast, as well as former Arcadia’s online brands of Burton, Dorothy Perkins, and Wallis. Shares in rival Asos, which warned on profit in October, were ended 6% lower. 

Boohoo's latest warning adds to concerns over Christmas trading after electricals retailer Currys said earlier this week its market had softened. Boohoo has been seeking to improve its image following negative publicity over supply chain failings but had warned on the outlook in September.

It said it expected net sales growth in the year to the end of February in 2022 to be 12% to 14%, compared to previous guidance of 20% to 25%. Adjusted earnings before interest, tax, depreciation and amortisation margin for the year was expected to be 6% to 7%, compared to previous guidance of 9% to 9.5%. 

"This is due to significantly higher returns rates impacting net sales growth and costs, with continued extended delivery times impacting international demand, consequently driving lower returns on marketing expenditure, and significant ongoing pandemic-related inbound freight cost inflation," it said.

Reuters