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Online fashion giant Boohoo has revealed a slump in sales over the past quarter as it battles against waning consumer confidence, intense competition and higher returns.
Shares in the company slid early on Thursday after it failed to keep up with lockdown-boosted trading.
Revenues fell by 8% to £445.7 million over the three months to May 31, compared with the same period last year.
The retailer said UK sales nudged 1% lower but it was particularly impacted by heavier declines elsewhere in Europe and in the US.
Nevertheless, Boohoo said it was optimistic as its UK sales improved month-on-month over the quarter and returned to net sales growth in May.
The group predicted that it will see low single-digit sales growth in the current year as it predicted “normalising consumer demand” in the second half of the year.
Boohoo highlighted that it continues to be “affected by pandemic-related and inflationary factors that negatively impact costs within its supply chain”.
It told shareholders it has sought to source more products near to its retail markets in an effort to offset rocketing freight and shipping costs.
John Lyttle, chief executive officer of Boohoo, said: “I am pleased with the progress we are making towards our strategic priorities, which is already having a meaningful impact operationally within the business.
“We have seen promising signs from the group’s sales performance in the UK, which has improved month on month in the period and we are looking ahead towards our key summer trading season as holidays ramp up and customers look to the latest fashion from across our brands.
“Looking forward, we will continue to focus on optimising both our financial and operational performance to ensure the business is well placed to take advantage of future growth opportunities.”
Shares were 13.4% lower at 56.4p in early trading, representing its lowest stock value for almost six years.