Boohoo has lowered its full-year sales growth guidance, from 25% to 12% – causing shares to plunge. Shares fell 11% this morning to 122.05p.
Despite strong demand, guidance was lowered due to continued supply chain issues and inflation.
Chief executive John Lyttle said: “The group has gained significant market share during the pandemic. The current headwinds are short term and we expect them to soften when pandemic related disruption begins to ease.
“Looking ahead, we are encouraged by the strong performance in the UK, which clearly validates the boohoo model.”
Gross sales increased by 28% whilst UK net sales were up 32% compared to the same period a year earlier.
“It’s never good when the name of your company is the same sound as the management are making after issuing a profit warning,” said Russ Mould, investment director at AJ Bell.
“Boohoo has already had a troubled year; add in the damage from the latest setback and you’re looking at a 66% share price slump so far in 2021.
“Last year the business was dragged over the coals for poor ESG practices, and it spent a long time trying to rectify what had become a PR disaster.
“This year supply chain issues and cost inflation are to blame for the online fashion retailer’s struggles, with a spike in product return rates also dragging the business down.”