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(Sharecast News) - Online retailer Boohoo Group posted a sharp slide in annual revenues on Tuesday, but forecast further growth as its turnaround programme gathered pace.
Posting numbers for the year to 28 February, the owner of Debenhams, PrettyLittleThing and Karen Millen as well as Boohoo, saw revenues slide 24.7% to 917m, while gross merchandise value (GMV) post returns was 19.7% weaker at 1.3bn.
However, the gross margin strengthened 40 basis points to 51.1% while adjusted earnings before interest, tax, depreciation and amortisation strengthened 34.6% to 53.3m.
The returns rate also improved 160 basis points to 28.2%, driven by the retailer shifting to a marketplace model, where third-party brands sell their goods on the group's platform and returns are traditionally lower.
Dan Finley, chief executive, said it had been a year of "significant and successful transformation" for the AIM-listed business.
He continued: "Our capital-lite, stock-lite, cash-lite, cash-generative marketplace model has now been rolled out across the entire group. The 2026 year has been a year of decisive action...the turnaround is firmly on track."
Finley put the programme in place following a difficult period for Boohoo. It saw sales slide amid stiff competition, returns soar and costs mount. It also fought off various attempts by leading investor Frasers Group to take control of the business.
Looking to the current year, Boohoo - which wants shareholder backing to formally change its name to Debenhams - said May trading had been approximately 8% ahead, with momentum continuing into June.
As a result, it now expects group GMV to return to growth in the current year. "The marketplace mix is expected to continue rising as the marketplace transition progresses across the group, and gross margin is expected to improve further as that mix, recognised at 100%, continues to increase," it added.
Adjusted EBITDA was forecast to show a double digit improvement, as operating costs continue to track lower.
That upbeat outlook did not help the shares, however, and by 0915 BST they had lost 4% at 24p.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said Boohoo had made "great progress" over the year.
He continued: "The main driver is its shift to a marketplace model. The group earns commission on these sales, and only this portion is recognised as revenue. While that weighs on the top line, it's higher margin, so profits are holding up better. The cost base has also been reset, helped by warehouse and tech platform consolidation, contract renegotiations and debt refinancing."
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