Boohoo reports increased profit margins and raises revenue forecasts
Manchester-headquartered fast fashion brand Boohoo Group PLC has reported a jump in profit margins in the UK for the six months to 31st August and raised full-year revenue and margin forecasts.
The company, which was heavily criticised in an independent report into working conditions at its suppliers last week, enjoyed a record half-year.
Customer numbers jumped by a third to 17.4 million, and shoppers bought 10% more items per basket. That drove half-year profits up 51%, from £45.2m to £68.1m, on revenues of £816.5m (against £564.9m).
Profit margins in the UK increased from 50.3% to 52.1%.
Looking ahead, Boohoo upgraded its revenue growth targets from 25% to between 28% and 32% for the full year. The second half of the year will see investment in more automation at its Sheffield and Burnley factories, the company added.
However, Boohoo warned that while the second half of the year had started well, “at this stage we feel it is prudent to continue to plan for a period of economic uncertainty in the second half of the financial year, including possible reduced consumer spending.”
Last week, an independent report into conditions at Boohoo’s suppliers found that the company knew about “endemic” problems in its Leicester supply chain from the end of 2019 at the latest.
The report, authored by Alison Levitt QC, stated that Boohoo did “too little too late” to address these issues.
In July, the Guardian and Sunday Times newspapers revealed that workers producing clothes for the fast-fashion retailer were being paid substantially below the minimum wage and that some were told to come into work even when displaying signs of Covid-19.
These allegations were initially denied by the company.