Boohoo shares suffered on Wednesday as the online retailer said they expected revenue to fall over the rest of the year after posting a 10% revenue decline in the six months to 31st August.
Compounded a poor performance so far this year, the company said the macro-economic environment and cost of living crisis would continued to hurt sales.
The company said of their outlook for the rest of the year: “our expectation is for a similar rate of revenue declines to persist over the remainder of the financial year if these conditions continue.”
Despite a gloomy outlook for Boohoo, there sales for the period are significantly higher than the same period prior to the pandemic highlighting the progress the business has made.
Nonetheless, such as stark warning on future earnings will not please investors.
“Once again Boohoo feels like a very apt name for the fallen fast fashion firm. Today’s warning shouldn’t come as a shock given the backdrop the business is facing but that doesn’t make it any less sobering,” said Russ Mould, investment director at AJ Bell.
“The peak in the shares above 400p at the height of the pandemic feels an awful long time ago. Though questions had emerged about the business model even during those heady days as the company was dogged by a scandal over working conditions in its supply chain.”
“If Boohoo leaned on unsustainably cheap labour to make the model work, it faces a very tough task now when other costs are going through the roof. This has not been helped by a big increase in return rates.”
Boohoo shares were down 6.5% on the day at 34.3p and are now down 72% year-to-date.