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boohoo.com plc

boohoo.com plc 106% group growth delivered in H1

boohoo.com Plc (LON:BOO) continues to exceed expectations, delivering H1 group revenue growth of 106% to £262.9m, with boohoo brand up 43% YoY (40% CER) and PLT delivering standout growth of 289%. The group continues to increase market share overseas. Growth in the USA was 160% (145% CER), and now represents 15% of total group sales, the largest market outside the UK. Rest of Europe saw growth of 89% (77% CER) while RoW grew 105% (89% CER). Sales in the UK doubled to £163.4m, representing 62% of total group sales, a reduction from 64% YoY. Nasty Gal is also growing strongly month-on-month and contributed £8.4m in revenue. We expect the business to continue to make significant investment in technology and infrastructure as well as the customer proposition and continue to drive long-term, profitable growth across all the brands. In-line with revised guidance, we upgrade our FY18 and FY19 revenue and EBITDA forecasts.

Strong KPIs across boohoo and PLT indicates an engaged customer base. The boohoo business has reported 5.8m active customers, up 29% YoY, with number of orders up 26% to 6.4m. Order frequency held at 2.11, while the conversion rate improved 20bps to 4.1%, AOV increased 7% to £39.92 and the number of items per basket increased 11% to 3.17. For PLT, active customers increased 150% to 2.0m, number of orders increased 222% to 2.9m and order frequency improved 19% to 2.22. The conversion rate increased 90bps to 4.3% while the AOV increased 25% to £37.95.

Revised guidance. Revenue guidance for the boohoo brand is for c.30% FY18 growth. Although this only requires 20% YoY growth in H2, it implies a 2 year sales CAGR of 33.8% to be achieved versus 41.5% achieved to H1 18 which is not as conservative as first appears given tougher comps. Revenue growth for PLT is expected to be c.150%, vs prior guidance of 75%, implying c.80% YoY growth delivered in the second half. FY Nasty Gal contribution is expected to be c.£23m.

Upgrades to FY18 and FY19 forecasts. Our FY18 group sales estimate increases by 12.3% to £530.5m (£472.5m), implying 80.1% YoY growth. Our FY18 adj. EBITDA forecast increases by 4.7% to £50.7m (£48.4m). This equates to a margin of 9.5%, again in line with guidance. We also see sales upgrades in FY19 of c.14% and c.5% to sales and EBITDA respectively.

As a multi-branded, leading e-commerce business, boohoo.com plc continues to deliver premium growth alongside premium margin. The outperformance and increased guidance yet again demonstrates the strengths of boohoo’s brand led model over established peers such as ASOS and Zalando who are growing at c.25% delivering single digit EBITDA margins of c.7%. We expect further outperformance as the brands continue to grow worldwide