Boohoo’s margins shaken by rising transportation and labor costs

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A smartphone with the Boohoo logo displayed is seen on a keyboard in this illustration taken September 30, 2020. REUTERS / Dado Ruvic / Illustration

LONDON, Sept. 30 (Reuters) – British online fashion retailer Boohoo (BOOH.L) warned on Thursday that freight inflation in its supply chain and higher wages for employees at its distribution centers would an impact on profit margins for the entire year.

Boohoo, which sells clothing, shoes, accessories and beauty products aimed at 16-40 year olds, said adjusted EBITDA margins for the year 2021-2022 are now expected to be 9% to 9.5 % compared to its previous forecast of 9.5% to 10%. .

The group also raised its forecast for full-year capital expenditure to 275 million pounds ($ 376.2 million) from 250 million previously.

Boohoo achieved adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of £ 85.1 million in the six-month period ended August 31, down 5% from the previous year, reflecting an increase of 26 million pounds of freight and logistics.

First half sales increased 20% to 975.9 million pounds and are expected to increase 20% to 25% year-round, implying growth of 20% to 30% in the second half.

Boohoo said consumer demand improved in August and September.

The group also announced that it will open a new distribution center in North America in 2023.

($ 1 = 0.7311 pounds)

Reporting by James Davey; edited by Costas Pitas and Jason Neely

Our Standards: Thomson Reuters Trust Principles.


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