1Q20 Trading Update UK-based online pure-play fashion company Boohoo Group reported revenue ahead of consensus during its 1Q20 trading update, for the quarter ended May 31, 2019. Key operating metrics are as follows:

• Revenues of £254.3 million, up 39% year over year at constant exchange rates and as reported, beating the consensus estimate of €253.7 million.
• Gross margin contracted 20 basis points to 55.0%.
• UK sales grew 27% year over year to £140.6 million.
• US sales increased 66% year over year at constant exchange rates to £51.3 million (up 64% as reported).
• The rest of Europe segment grew sales 71% at constant exchange rates to £38.2 million (up 72% as reported).
• Rest of world sales increased 28% at constant exchange rates to £24.2 million (up 26% as reported).
• The company reported net cash of £194 million compared to £151 million in the same quarter previous year.
• Boohoo Group acquired the brand and intellectual property assets of MissPap.

Revenue Breakdown by Brand The group reported strong performance across all brands with PrettyLittleThing And Nasty Gal posting stellar growth. Boohoo

• Revenues up 28% at constant exchange rates to £123.5 million (27% as reported).
• Gross margin improved 210 bps to 54.1%.

PrettyLittleThing

• Revenues surged 42% at constant exchange rates to £112.1 million (up 42% as reported).
• Gross margin contracted 280 bps to 55.9%.

Nasty Gal

• Revenues grew 157% at constant exchange rates to £18.2 million (up 153% as reported).
• Gross margin contracted 280 bps to 56.1%.

CEO John Lyttle commented:

The group has made a strong start to the year as we continue to disrupt and capture market share in the UK and internationally across all our brands. I’m delighted that the group topped the UK Hitwise rankings in May for the first time, demonstrating how our multi-brand strategy is really capturing our customers’ attention. We have ambitious plans for the group, and continue to invest to ensure that our scalable multi-brand platform is well positioned to disrupt, gain market share and capitalize on the global opportunity in front of us.

Outlook For FY20, the company maintained its previous guidance:

• Overall revenue growth in the range of 25% to 30%.
• Adjusted EBITDA margin of around 10%.
• Capital expenditure in the range of £50 to £60 million.

In FY20, the consensus estimates recorded by StreetAccount call for Boohoo Group to report revenues of £1.12 billion, up 31% year over year, and EPS of 4.9 pence, up 18%.