Boohoo group, the London-listed owner of Debenhams, Karen Millen and Pretty Little Thing, has set its sights on a £100m pre-tax profit after reporting its first positive result since 2021. The fast fashion firm posted a £28m profit for the six months to the end of August, reversing a £18m loss in the same period last year, although revenue slipped three per cent to £410m.
Turnaround 'significantly ahead' of schedule
The company said its transformation strategy is "significantly ahead" of schedule, underpinned by substantial cost reductions as it reinvents itself as an online marketplace for third-party brands. The group has faced intense competition from fast-fashion rivals such as Shein and Temu.
In a statement to shareholders, the group said it aims to achieve a £100m pre-tax profit and generate "significant cash" in the "medium term".
Brand performance and asset sales
The Debenhams brand recorded 14 per cent revenue growth to £364m during the period, while sales at Pretty Little Thing and Boohoo rose one per cent to £369m. The group said consolidating the management teams behind Boohoo and Pretty Little Thing, a brand aimed at women aged between 16 and 35, has produced "visible benefits in young fashion womenswear".
Sales at BoohooMan fell by more than a quarter to £80m, though the firm said this brand is declining at a slower pace and achieving improved profitability.
Since taking on the role of group chief executive in 2024, Dan Finley has been working to dispose of non-core assets to reduce expenditure. In recent months, the group has sold a warehouse in Sheffield to fast fashion rival Primark for £90m and offloaded its Nasty Gal brand for £12m. "Together, these transactions materially reduce the Group's debt, and net debt is expected to be negligible at the year-end."
CEO comment and analyst view
Finley said: "The turnaround continues at pace. This is the first time the Group has delivered positive profit before tax since August 2021. I am pleased to report that net debt is expected to be negligible at year-end. This is significantly ahead of our original guidance provided at the start of the year. I see material opportunities ahead and we are fully focused on maximising them."
Analysts at Panmure Liberum said the group's "pace of change has been breathtaking in the past year". The broker, which maintains a 'buy' rating on the stock, suggested the "dramatic increase" in profitability positions the group to achieve a near-£50m pre-tax profit by the decade's end.
Boohoo intensified its turnaround in February when it secured £35m from investors to reduce debt. The equity raise triggered a decline in the group's shares, though Finley insisted it would "deliver value for all shareholders". The company has also faced criticism from retail magnate Mike Ashley, whose Frasers Group empire challenged its executive remuneration packages but was unsuccessful in a bid to seize control of its board.
