Can AIM superstar Boohoo.com resume its record high-hitting run following next week’s half year results?
For most of the year it has been business as normal for Boohoo (LON:BOOH). The stock surged from an opening price of £1.35 to an all-time peak of £2.73 at the start of June, the day after its most recent financial update. Since then, however, the various inflation/wage growth/retail sales warnings in the UK have caused the stock to stall, leaving it to spend the last few months floating between £2.25 and £2.50. Boohoo.com PLC now sits at a current trading price of £2.48.
Merely glancing at the company’s figures quickly explains what all the fuss is about. Its first update of the year came back in January, where the firm revealed a whopping 55% jump in sales for the final 4 months of 2016, including a staggering 230% sales increase in the US, in part thanks to its Black Friday promotions.
Those laughably big numbers were present once again in April’s full year results. Boohoo’s annual pre-tax profit rocketed 97% higher to £31 million, with sales up 51% to £295 million. It also saw active customers rise to 1.3 million, while completing the acquisitions of a majority interest in PrettyLittleThing (which is admittedly owned by co-CEO Mahmud Kamani’s son) and the intellectual property of Nasty Gal. That all this failed to spark much of a reaction from investors – in fact the stock actually dipped around 1% on the day of the results – shows just how high Boohoo has set the bar for itself.
Its aforementioned June statement, at least, was greeted with a bit more enthusiasm, sending the stock 18% higher. There Boohoo announced that first quarter sales had climbed 106% year-on-year, totalling £120.1 million for the 3 months to the end of May. It also confirmed it had raised £50 million from a share placing, with the money set to fund a new 600,000 square feet warehouse.
If Boohoo is to regain its momentum with next Wednesday’s interim results, then it needs to bust out another set of mega-figures. Luckily, analysts are expecting the second quarter to have maintained the strength of Q1, with half year sales set to more than double to £256 million.
Boohoo.com PLC has a consensus rating of ‘Buy’ with an average target price of £2.16.
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