boohoo.com (LON:BOO) has traded strongly across all regions in the four months to 31 December, including the key Black Friday and Christmas periods, delivering headline group sales growth of 100% (93% CER), or £228m. boohoo delivered sales of £142.6m, up 25% (21% CER) against a strong prior year comp of 55%, while PLT continues to deliver standout growth of 191%, or £73.8m. As a result, the UK, RoE and USA geographies all delivered triple digit growth of 107%, 102% and 105% respectively, with the RoW also delivering solid YoY growth of 59%. Nasty Gal continues to grow impressively month-on-month from start up in March 2017, contributing £11.9m in revenue, bringing total year-to-date revenue to £20.2m.
As a result of strong trading over the period, management have again increased FY18 sales growth guidance for the group to c.90%, against previous guidance of 80%, whilst narrowing the EBITDA margin to be between 9.25% and 9.75% versus 9% to 10% previously. This drives modest upgrades of c.5%-6% to our numbers in FY18 as shown below. Our FY19 numbers remain unchanged for now pending further guidance post the year end.
Revised guidance by division. Revenue guidance now implies FY18 growth of c.31% for the core boohoo brand. Although this only requires c.22% YoY growth in H2 versus 25% delivered in Q3 and 43% delivered in H118, it implies a 2-year sales CAGR of c.35%. FY18 revenue growth for PLT is now expected to be c.200%, vs our prior estimates of 150%, implying c.160% YoY growth delivered in the second half versus 289% in H118. Our FY18 contribution from Nasty Gal remains unchanged at c.£23m.
Upgrades to FY18. Our FY18 group sales estimate increases by 5.7% to £560.6m (£530.5m), implying 90.3% YoY growth. FY18 adj. EBITDA forecast increases by 5.5% to £53.2m (£50.7m), with margin unchanged at 9.5%.
|Year-end Feb||FY18 |
|Revenue growth (%)||90.3||80.1|
|Gross Profit (£m)||287.3||272.2||5.5|
|Adj. EBITDA (£m)||53.2||50.7||5.1|
Source: Zeus Capital estimates
As a multi-branded, leading e-commerce business, boohoo continues to deliver premium growth alongside premium margin. Triple digit group growth and increased guidance yet again demonstrates the strengths of boohoo’s brand led model over established peers such as ASOS and Zalando who are growing at c.25% delivering single digit EBITDA margins of c.6-7%. We expect further outperformance as the brands continue to grow worldwide.