Boohoo profits soar despite factory scandal, shares rise

Boohoo profits soar despite factory scandal, shares rise

Boohoo

Boohoo (LON: BOO) saw profits soar 53% in the six months to 31 August.

Despite the pandemic and factory scandal, the retailer’s revenue grew to 45% to £816.5m from £564.9m in the same period a year earlier.

The boost in profits and sales around the world for Boohoo comes at an interesting time. The allegations of the factory warehouse in Leicester led to a backlash among MPs, the general public, and the industry.

The fashion retailer published an independent report on its suppliers in Leicester, accepting supply chain criticisms and causing the share price to recover.

Despite the scandal, Boohoo has reaped the benefits of the shift to online shopping during the pandemic.

“Our business, along with many others, has faced some of its most challenging times in recent months: the onset of the pandemic meant we had to adapt our operations with nearly all office-based colleagues working from home; we introduced new ways of working safely in our distribution centres; and we have comprehensively investigated reports on concerning and unacceptable working practices in our Leicester supply chain,” said John Lyttle, the chief executive.

“There are many challenges still ahead due to uncertainties posed by the COVID-19 pandemic, but despite these challenges there are many positives from our activities in the first half. The resilience of our business model and the commitment and flexibility of our colleagues and partners has enabled us to continue to operate our business successfully.

“We are grateful to all and pleased to be able to report a strong performance with continued high growth rates in revenue and strong profitability. We also acquired two new well-known women’s brands, Oasis and Warehouse, and we acquired the remaining minority interest in PrettyLittleThing, all of which will support our continued growth and profitability.”

Boohoo has upgraded its revenue growth targets from 25% to 28%-32% for the full year. Shares (LON: BOO) jumped 3% in early trading.