Boohoo issues profit warning due to higher return rates

Boohoocom

Fast fashion giant Boohoo has blamed “significantly higher return rates” and continued extended delivery times as it issued an unexpected profit warning.

In a trading update for the three months to November 30, 2021, Boohoo said it now expected EBITDA margin for the year to be 6% to 7% or between £117m to £139m, compared with the previous 9% to 9.5% guidance.

Net sales growth is also expected to take a hit, down to 12% to 14% for the year compared with previous guidance of 20% to 25%.

Boohoo blamed a number of factors for the downgrade, with “significantly higher returns rates” hitting net sales and impacting margins in the UK, while a fall in customer demand and issues with air freight have affected European and US sales respectively. 

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