Boohoo Group Plc lowered its earnings and revenue forecasts as the UK fast fashion retailer cuts prices to attract cash-strapped shoppers.
(Bloomberg) — Boohoo Group Plc lowered its earnings and revenue forecasts as the UK fast fashion retailer cuts prices to attract cash-strapped shoppers.
Full-year sales will probably drop 12% to 17%, Boohoo said Tuesday. Adjusted earnings may drop as much as 8%, according to the retailer, which previously expected an improvement.
The owner of the PrettyLittleThing and Karen Millen brands has had a difficult few years as it weathered a labor scandal and then had to deal with inflation and a drop in spending online after an e-commerce boom when stores were shut during covid lockdowns. It has also had to cope with rising freight and energy costs, even though these are starting to ease now.
Rival Asos Plc has also struggled and last month said that a wet July and August had resulted in disappointing sales.
Boohoo said it has been reducing prices to boost its competitive position in a UK clothing market where inflation has hit 8%.
Its US business has also suffered as it took too long to send parcels to customers although it has since opened a distribution center there which it said is helping next day and express delivery options.
The company previously forecast full-year revenue to come in flat or decline as much as 5% this fiscal year.
Boohoo is working on annual cost savings of £125 million ($151 million) pounds to boost profitability.
(Updates with earnings forecast in first, second paragraphs)
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