1Q19 Update

British online fashion pure-play Boohoo.com delivered group revenues of £183.6 million in the first quarter ended May 31, up 52.0% year over year at constant currency (CCY) and up 53.0% as reported. The retailer saw strong revenue growth across all brands and regions during the quarter. Group gross margin expanded by 100 basis points to 55.2%, led by a strong performance at PrettyLittleThing. Boohoo.com delivered a strong balance sheet with net cash of £151 million (versus £74 million in 1Q18) at the end of the period.

Revenue Breakdown by Brand

• Boohoo: Revenues were up 12.0% as reported (up 10.0% at CCY) to £97.2 million, against a strong comparative of 48.0% growth (44.0% at CCY) in the prior year. Gross margin was down 110 basis points to 52.0% and retail gross margin was down by 170 basis points to 54.6%, but improved sequentially through the period, the company stated.
• PrettyLittleThing: Revenues soared by 158.0% (160.0% at CCY) year over year to £79.2 million. Gross margin was up 490 basis points to 58.7% driven by full-priced sales performance; retail gross margin was up by 410 basis points.
• Nasty Gal: Revenues were up by 149.0% (163.0% at CCY) to £7.2 million. Gross margin was down 11 percentage points to 58.9%, in line with FY18’s exit rate and the company’s expectations.

Revenue Breakdown by Region at CCY

• UK revenues were up 49.0%.
• Rest of Europe revenues were up 71.0%.
• US revenues were up 78.0%.
• Rest of World revenues were up 22.0%.

Outlook

Boohoo.com maintained the guidance provided at the FY18 results update: for full-year revenue growth in the range of 35.0%–40.0% and adjusted EBITDA margin of 9.0%–10.0%. Management reiterated that all other guidance—for the current fiscal year and the medium-term guidance to deliver sales growth of at least 25.0% per annum and 10.0% EBITDA margin—remain the same. Consensus estimates were compiled before Boohoo.com announced its latest results. In FY19, analysts expect Boohoo.com to report the following:

• Group revenue growth of 40.7%.
• A gross margin decline of 57 basis points.
• PBT growth of 21.0%.
• Adjusted EPS growth of 23.8%.