British online fashion retailer Boohoo (BOOH.L) slid to a loss after revenue fell 17% in its first-half and said a slower than expected recovery in sales volumes could result in little or no top-line improvement for the full year, hitting its shares.
The stock plunged 10% in early deals on the downgrade, sinking to their lowest level since 2015, after it posted on Tuesday a pre-tax loss of 9.1 million pounds ($11 million).
The British company, which includes PrettyLittleThing and Nasty Gal in its brand portfolio, reported revenue of 729.1 million pounds for the six months to the end of August.
It said that revenue for its full-year to end-February 2024 was now expected to drop by 12% to 17%, a major downgrade from its previous forecast of flat to minus 5%.
Hargreaves Lansdown said that the fall in the rate of cost inflation plus the unclogging of supply chains and lower shipping costs should have helped Boohoo in recent months but it was struggling.
"Despite these tailwinds, Boohoo turned loss-making in the first half, highlighting the sticky position the group finds itself in," Hargreaves Lansdown analysts said in a note.
Boohoo's competitor ASOS (ASOS.L) in September reported a 15% fall in fourth-quarter sales and forecast earnings around the bottom of its guided range but said it was making progress with its turnaround plan.
Boohoo CEO John Lyttle said in a statement: "Our confidence in the medium-term prospects for the Group remains unchanged as we execute on our key priorities where we see a clear path to improved profitability and getting back to growth."
Boohoo said tighter inventory management, distribution improvements and cost cuts had delivered a 30 point improvement in its core earnings margin to 4.3%, in line with its forecast of 4% to 4.5% for the year.
($1 = 0.8289 pounds)
