Boohoo on course to unveil strong full-year sales
The online fashion retailer will unveil its full-year results on Wednesday, but how will the coronavirus pandemic impact its earnings?
Boohoo will unveil its full-year results on Wednesday, with the retailer expected to reveal soaring sales in its latest earnings update, despite the economic uncertainty created by the coronavirus pandemic.
The online fashion retailer is expected to record a 42% increase in group sales to £1.22 billion for the year ending on February. The company also is forecast to record adjusted earnings (before tax and interest) of £123.6 million.
If the company is able to meet analysts expectations in its full-year results on Wednesday, it will likely help its share price climb higher, with it proving to investors that consumers thirst for fashion has not diminished in these uncertain times.
Boohoo soldiers on despite Covid-19 lockdown
A key component to Boohoo’s resilience in the face of the coronavirus outbreak is its online-only presence, with the company’s operations able to continue despite the government-imposed lockdown which has hit high street rivals hard.
As an example, high street brand Next has seen its shares fall more than 30% since the start of the year amid a significant slump in sales, with it attempting to quell concerns by saying it can withstand a £1 billion reduction in revenues in the year to January 2021 without breaching the terms of its borrowing agreements.
Boohoo shares, however, are down just 7% year-to-date, with it telling investors in January that it hopes to deliver revenue growth of between 40% - 42% for the year to February 2020.
Covid-19 expected to hurt quarterly sales
But despite all the optimism surrounding Boohoo, analysts believe that its fourth quarter (Q4) sales could take a tumble as a result of the coronavirus pandemic.
Analysts at Peel Hunt admitted to cutting ‘forecasts to factor in a 25% drop in sales this quarter’, with growth expected to be flat in Q1 of the new financial year.
However, analysts at Peel Hunt still reiterated their ‘buy’ rating for the stock despite revising their outlook for the company’s sales performance in April ahead of its full-year results.
How to trade stocks with IG
Create an IG Trading Account or log in to your existing account
Enter ‘Boohoo’ in the search bar and select it
Choose your position size
Click on ‘buy’ or ‘sell’ in the deal ticket
Confirm the trade
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
React to global volatility
Market volatility continues as coronavirus concerns amplify. Trade with IG and take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and only incur a fee when triggered
- Round-the-clock assistance – our highly skilled team are available when you need support
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.