Boohoo's half year: What the analysts say

The key UK market grew 50%, while continued outperformance was seen in the Rest of Europe which grew 50%. This has no doubt been boosted by the launch of the local language websites in Germany and Spain, adding to the French site that launched last October. There are huge opportunities throughout Europe for boohoo to gain market share and the foreign language websites are laying the foundations for sustained future growth in the region. We think that the impact on opening local language sites, alongside targeted marketing campaigns, positions the company well going into the second half of the year; we look forward to more detail at the interims.Like-for-like revenue growth should continue to increase throughout the second half, as revenue adopts a smooth upward growth trajectory and the year-on-year comparatives become easier. Current momentum seen in the first half means that the company is on course to achieve full year projections: the likely sales growth rate of c.45% makes boohoo one of the fastest growing businesses in the UK – John Wilson, Zeus Capital

Clearly the positives are that August was a good month for the fashion trade: new AW ranges have been met with highly favourable weather conditions. We will see how the ASOS numbers look next Tuesday but the fire at its distribution depot has reportedly hindered some sales growth so Boohoo would have been a beneficiary of that. On the other hand this is a highly competitive space and any acceleration of momentum is impressive. Possible the most important number is “rest of the world”. What was a sales decline of 20% in the first quarter has become flat turnover in the second quarter (up 8% in CER). It appears that Australia is starting to respond to the price activity that management has conducted there and we are hopeful that a full return to the black in teh second half will occur - Jonathan Pritchard, Oriel

The second quarter saw an accelerating sales trend as a result of management stepping up investment in customer recruitment, enhancement of the proposition in Europe through the launch of local language sites and a rebasing of prices in Australia. Comparatives in the second half begin to ease at a time when sales growth is accelerating, giving us confidence that the required operating leverage in second half to hit full-year forecasts of £19.5m EBITDA can be achieved. A mature Irish market is likely to mean that the launch of local language sites in France and Germany has had a bigger influence on growth - Kate Calvert, Investec

Boohoo is a high growth online fashion brand which appeals to young consumers with its fast fashion and low prices. Its unique approach to buying ensures low mark-down risk and high margins and this affords high levels of marketing spend for expansion whilst still translating into double digit EBIT margins. Although there is considerable investment going into infrastructure and resource, which depresses margins this year especially in H1, Boohoo has adopted a low risk approach to implementation and looks well placed to deliver substantial profitable growth over the medium and long term – Matthew McEachran, N1 Singer

Good old Boohoo continues to deliver the goods in no uncertain fashion and it has reported today in its pre-close update a surge of 41% in sales in the second quarter (the 3 months to Aug 31^st), on a constant currency basis. This is an acceleration on the already impressive 28% rate of growth seen in the first quarter, as expected, given the step-up in marketing activity. The total sales growth is boosted by the impact of successful new overseas website launches, but the UK growth of 50% in the second quarter is particularly striking, as that is well ahead of the UK online fashion market. – Nick Bubb, independent analyst