London: Boohoo, a British online fashion store, lowered its outlook for the full year on Wednesday. It said that a worsening macroeconomic and consumer environment, as well as a 58% drop in core earnings for the first half of the year, were to blame.
The company’s shares have dropped by 70% this year. On Wednesday, the company said that it now expected revenue to drop for the whole year 2022-2023, with a core earnings margin of between 3% and 5%. It used to be predicted that sales would grow by “low single digits” and that the EBITDA margin would be between 4% and 7%.
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It said that the lower margin forecast was because costs had gone up because of inflation and that operations had become less efficient because sales were lower than expected.
Boohoo sells clothes, shoes, accessories, and beauty products to people between the ages of 16 and 40. For the six months ending on August 31, the company’s core earnings were 35.5 million pounds, which is about $37.9 million. This is down from 85.1 million pounds a year earlier.
Revenue dropped 10% to 882.4 million pounds because consumer demand was lower than expected, there was a big rise in product returns, and delivery times for products sold in overseas markets got longer.
“The macroeconomic and consumer backdrops have had an effect on the group’s revenues in the first half. “If these conditions continue, we expect a similar rate of revenue decline to continue for the rest of the financial year,” Boohoo said.
This month, online competitor ASOS (LON:ASOS) and retailer Primark, which does not sell online, both gave profit warnings.
Related: The U.S. class action lawsuit against Boohoo has been settled for good.
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