Fashion retailer Boohoo said it would still hit expectations during the financial year despite a massive drop in sales during the last few months of 2022.
The business said that its UK and US units had driven an 11% fall in sales across the group in the four months to the end of December.
The decline did not come as a surprise to either Boohoo or its shareholders, who had been warned that sales were set to drop over the period.
As a result, Boohoo was able to say on Thursday that it expects earnings before interest, tax, depreciation and amortisation to measure up to market expectations.
Revenue is set to drop by around 12% over the financial year, the business said.
So far, in the 10 months to the end of December, revenue dipped from a little under £1.7 billion to just over £1.5 billion, a 10% fall.
“Performance in the period is in line with expectations and reflects the normalisation of the channel shift online over the last 12 months, but demonstrates the significant market share gains the group has made over the last three years,” said chief executive John Lyttle.
“Looking ahead, whilst the demand outlook is uncertain due to macro-economic factors, cost inflation is expected to begin to moderate in the second half of the year.”
So far this year, the US has been by far the worst-performing market for Boohoo. In the 10 months to the end of December revenue dropped 23% to £306.3 million when compared to the same period a year earlier.
The silver lining in the country is that this malaise seems to be easing somewhat. In the last four months of the calendar year revenue dipped by 12%.
In the UK – Boohoo’s biggest market – revenue fell by 11%.
Mr Lyttle said that the business is trying to manage costs but will continue to invest where needed.
“We have reduced inventory by 27% year on year and with this focus on careful inventory management, strong cost control and cash management, we will continue to drive operational and cost efficiency across the business,” he said.
“The group has continued to invest in key strategic priorities that will enable future growth, and the progress made gives us confidence that as macro-economic headwinds ease it will be well-positioned to rebound strongly.”