# Boohoo “continues to outperform the wider retail market” says Zeus Capital

- Link: https://www.directorstalkinterviews.com/boohoo-continues-to-outperform-the-wider-retail-market-says-zeus-capital/412799715
- Published: 2019-12-03T10:25:27+00:00
- Author: Amilia Stone

**[Boohoo](https://www.directorstalkinterviews.com/company/boohoo/boo.l) Group has
released a brief statement confirming ongoing strong trading across its key brands(
boohoo.com, PrettyLittleThing, Nasty Gal and BoohooMAN) and another record-breaking
performance over the all-important Black Friday weekend. Confirmation that the Group
is trading “comfortably in line with market expectations” (FY20 company complied
revenue growth consensus +37.6% YOY), implies growth at the top end of management’s
guided 33% to 38% range. We upgrade our forecasts to reflect this, having previously
sat at the mid-point of this range and the lower end of consensus. We see scope 
for history to repeat itself and deliver further upgrades in January, given management’s
traditionally cautious stance ahead of peak December trading in contrast to ongoing
momentum across the Group’s portfolio of brands.**

 * **Operational excellence:**  Pleasingly, the Group’s operational performance 
   has been strong at both the Burnley and Sheffield warehouses, with Black Friday
   being the first peak trading period since the automation of the Burnley site 
   went live in late March. Automation should allow the Group to clear high order
   volumes quickly, allowing it to return promptly to business as usual trading 
   for the key December trading period.

 * **Acquisitions**: The integration of recently acquired brands including MissPap,
   Karen Millen and Coast has gone smoothly, with all three brands successfully 
   migrated to the Group’s platform. Karen Millen and Coast relaunched in October
   and these initial ranges have been well received. The Group is continuing to 
   broaden product ranges, with the number of styles on offer already at levels 
   seen prior to these brands’ entering administration, suggesting a quick and seamless
   integration into the Group’s supply chain.

 * **Forecasts**: We nudge our FY20 revenue forecasts higher (c.1.4%) reflecting
   today’s confirmation that the Group is trading in line with market expectations
   of revenue growth of 37.6% YOY and an EBITDA margin of c.10%, full detail is 
   presented in Exhibit 1 below. We expect greater colour on the full year outlook
   in the next trading statement to be released on 14^(th) January 2020 and believe
   there is potential for further upgrades to guidance, given ongoing momentum across
   the Group’s portfolio of brands.

 * **Valuation:**  The Boohoo Group continues to outperform the wider retail market
   as evidenced by its record Black Friday weekend. It’s track record of operational
   excellence also remains intact with another seamless peak trading period delivered
   successfully. We believe boohoo will continue to be an innovator and disruptor
   at the forefront of the fashion ecommerce market, backed by one of the most experienced
   and highest quality management teams in the sector and a solid balance sheet 
   with forecast net cash of £260m for FY20.

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