Boohoo boosts outlook as turnaround gathers pace

(Sharecast News) - Boohoo Group said on Monday that annual profits were on track to "comfortably" beat guidance, fuelled by a robust second half, as the online retailer's turnaround gathered strength.

Updating on year-end trading, the owner of Debenhams, Pretty Little Thing and Karen Millen said earnings before interest, tax, depreciation and amortisation in the second half had surged 76%.

As a result, EBITDA for the year to 28 February 2026 was now set to come in at �53m, up 36% year-on-year and "comfortably ahead" of previously upgraded guidance for �50m.

Boohoo, which is seeking to change its name to Debenhams, also said it remained confident of achieving double-digit adjusted EBITDA growth in the current year.

Dan Finley, chief executive, said: "Our multi-year turnaround strategy continues at pace.

"Our pivot to the stock-lite, capital-lite, highly-profitable marketplace is working. The cost base has been reset, the warehouse consolidation completed, the tech re-platform delivered, the stock base rightsized, most of the onerous costs exited and the brand management teams strengthened."

Boohoo has endured a turbulent few years, including sliding sales in the face of stiff competition, soaring costs and bruising battles with Mike Ashley. The billionaire's Frasers Group is Boohoo's biggest shareholder with a near 30% stake.

The fast fashion specialist first sought to formally change its name to Debenhams, the department store brand it bought out of administration in 2021, last year. At the time, it argued that the successful turnaround of Debenhams was a blueprint for Boohoo's wider revival. But the move was blocked by Frasers.

As at 1130 BST, the AIM-listed stock was trading 2% higher at 17.62p.

Danni Hewson, head of financial analysis at AJ Bell, said: "The retail backdrop may be unhelpful, and a battle with its largest shareholder Frasers ongoing. But Boohoo, trading under the Debenhams banner, does seem to be getting some traction with its turnaround efforts."

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "The group's pivot to a marketplace model is driving much of the improved financial performance, allowing sales to scale quickly as more sellers are brought into the fold. The third-party sellers also own the stock and are responsible for picking, packing and shipping orders, removing a host of costs and inventory risk from Boohoo's operations. As a result, fixed costs have fallen by more than �50m to �119m, and are expected to fall further to around �100m this year.

"Progress on trimming the cost base has been impressive. But long-term growth will rely on moving the top line in the right direction. While sales trends are improving, they're still in negative territory, so it's a key area to watch, especially in a competitive retail market."

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