Boohoo shares hit despite reporting bumper festive sales
SHARES in Boohoo fell as much as 9.8pc even after the UK online fashion retailer lifted its full-year growth forecast, as a trading update failed to live up to investor expectations for a blowout holiday season.
The company forecast that sales will increase by 43pc45pc, up from a previous range of 38pc-43pc, after Christmas sales gains were led by popular brands
Boohoo’s performance contrasted with a preChristmas profit warning from rival Asos and weak holiday sales from bricksand-mortar chains like Debenhams.
Some investors wanted more, and the shares fell the most since the December update from Asos.
Expectations for Boohoo were high after the company said in mid-December that sales were “comfortably in line with market expectations”, prompting a rally in the shares, Barclays analysts led by Andrew Ross wrote in a note.
While Boohoo is doing better than rivals, they said, its growth hasn’t accelerated from the first half despite easier comparisons.
“The guidance uplift doesn’t point to any upgrade to consensus,” the analysts said.
Boohoo’s marketing strategy harnesses Instagram, where its brand ambassadors include Kourtney Kardashian and participants on the reality TV show ‘Love Island’.
It is expanding beyond its core UK market and achieved 78pc growth in the US in the latest four months.
Boohoo forecast sales will increase by 43pc to 45pc, up from 38pc to 43pc