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Three Quick Facts: Boohoo, N Brown and ASOS

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Here are three things you need to know in the financial markets today from investment writer, Tony Cross.

1. Boohoo trading update shows modest YoY decline

There’s a trading update out from boohoo group (LON:BOO) this morning, covering the three month period to 31st May. Revenues are up by an impressive 75% compared to pre-COVID figures, but sit some 8% lower than a year ago, which admittedly still tells a strong story. Gross margins have fallen by 220 bps and guidance for the full year remains unchanged with low single digit revenue being forecast.

2. N Brown strategic brands faring well, but slugging consumer confidence weighing

Clothing retailer N Brown (LON:BWNG) also published a trading update today, covering the 13 weeks to 28th May. The company reported continued growth in its strategic brands, with revenues up 2.5%, whilst full year EBITDA guidance remains unchanged on an adjusted basis. That said, the note adds that sales volumes have been softer since the start of the year reflecting pressures on consumer confidence which show no signs of abating in the short term. Management add that they expect the trading environment to remain challenging.

3. ASOS revenue growth revised sharply lower

Keeping with the fast fashion theme, ASOS (LON:ASC) also has a trading statement out today, covering the three months to 31st May. Gross sales accelerated, however net sales were impacted by a significant increase in returns rates in the UK and Europe towards the end of the period, reflecting inflationary pressures on consumers which has a disproportionate impact on profitability. Guidance for the year updated to reflect uncertain consumer purchasing behaviour and the potential continuation of higher returns with revenue growth expected to be 4% to 7% – down from the previously stated 10% to 15%and adjusted PBT now expected to be in the range of £20m to £60m. Management add that it is too early to tell how long this pattern of consumer behaviour will last for.

 

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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