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boohoo Group PLC on Thursday warned that high return rates will continue to hit sales, though it expects annual profit to be in line with market forecasts.
The online retailer said its fourth quarter net sales grew 7% annually, or 48% on a two-year basis. It meant that for the year, net sales climbed 14% yearly and by 61% on pre-virus times.
‘As expected, net sales growth in the quarter was impacted by higher returns rates year-on-year due to product mix. This is expected to continue in the first half of FY23,’ boohoo added.
boohoo said its international trading remains hurt by supply chain pressures and longer customer delivery times. However, the company's Rest of the World segment returned to growth in the fourth quarter, bolstered by a strong wholesale offering.
For the year ended February 28, boohoo expects to report group adjusted earnings before interest, tax, depreciation and amortisation of £125 million. It is an outcome that would be in line with guidance and market expectations, though down 28% from £173.6 million a year earlier.
The market responded positively to boohoo's update on Thursday, some respite for a stock which was hit by a sales warning back in December.
boohoo shares were 14% higher at 90.26 pence each in London on Thursday morning.
Back in December, the company cut its sales guidance following the emergence of the Omicron variant of Covid-19. boohoo cut its annual sales growth guidance to a 12% to 14% range, from previous guidance of 20% to 25%.
boohoo shares are 72% lower than they were a year ago.
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