Boohoo Group PLC (LON:BOO), the online fashion retailer, has reported strong sales growth during the coronavirus pandemic and announced the acquisition of the online businesses of Oasis and Warehouse from the businesses’ administrators for £5.25mln in cash.
The two retail chains, which collapsed in April, previously generated online sales of £47mln, and for the AIM-listed group this follows its similar acquisitions of Karen Millen and Coast last year and takes its stable of brands to nine.
Boohoo’s revenues came in at £367.8mln for the three months to May 31, 2020, the first quarter of its financial year, which was a 45% increase on the same period last year and was much better than the 15% growth that analysts were on average expecting.
The group’s UK sales were up 30% to £183mln, outdone by revenues from the US and Ireland which surged by 79% and 66% to £92mln and £63.4mln, respectively. Revenues from the rest of the world were up 22% to £29.4mln.
it noted that the boohoo, Pretty Little Thing and Nasty Gal brands all saw “strong underlying growth”, while newer brands MissPap, Karen Millen and Coast “continue to trade strongly” after being integrated onto the group’s online platform last year.
“Areas such as loungewear and athleisure have performed well as customer buying habits adapted to a stay at home lifestyle, with our marketing strategy and content being pivoted to reflect this change and we have seen strong levels of engagement in response,” Boohoo said.
Despite or perhaps because of the pandemic, the group’s gross profit margin was up 60 basis points year on year to 55.6%.
Boohoo said it has not used any government financial support packages and has offered full pay for any staff who needed to self-isolate during the pandemic.
The shares shot up 11% to a new all-time high of 433.5p in early trading on Wednesday and by mid-afternoon were still elevated at above 420p.
Broker Liberum said it was a “blowout” quarter and the performance “has no doubt benefited from the group’s main bricks and mortars competitors being closed”.
Having recently acquired full ownership of PLT and with two more purchases, the analysts said “Boohoo is now looking like the pre-eminent leader in womenswear in the UK”.
It was noted that the company has more than £350m of net cash to pursue further M&A, while it has 4.6% of the UK online fashion market and 0.4% of the EU and US markets, “and as M&A across the industry ratchets up over the next few months, we expect boohoo will play its role”.
–Adds broker comment–