Boohoo Group has stated that it has made “substantial progress” in the first half of its financial year, despite a 17% decline in revenue year-on-year.

The online clothing retailer found that revenue hit £729.1m, a drop of 17% compared to H1 2022, with UK and international revenue falling by 19% and 15% respectively. This is despite of Boohoo discounting its products to help drive value for its teenager to twenty-somethings market.

In its core brands, revenue dropped by 10%, although this was consistent with prior guidance that revenue was to drop by 10-15% as a result of the group’s decision to target more profitable sales.

As a result of the weaker revenue, Boohoo has said that sales for the year, which ends in February 2024, are now forecast to drop by between 12% and 17%.

The group’s gross margin increased by 90bps to 54.3% compared to the same period last year, despite significant reinvestment of supply chain and input cost deflation into lead times and lower prices for customers.

In the six months to August 2023, Boohoo spent £36.3m of capital expenditure on infrastructure for future growth, which includes capacity expansion as part of the Sheffield automation project and the development of a distribution centre in the US.

However, shares in the firm dropped by 11% at market open, after falling by 10% in the year to date.

Boohoo said that it has identified more than £125m of annualised cost savings across the cost of goods, supply chain and overheads, which are expected to be delivered across the 2024-25 financial years.

Boohoo’s group chief executive officer, John Lyttle, said: "Over the first half we have made substantial progress across key projects and initiatives, including the launch of our US distribution centre. We have seen significant improvements in sourcing lead times and invested in pricing to reinforce our value credentials.

"We have identified more than £125m of annualised cost savings that support our investment programme. Our confidence in the medium-term prospects for the group remains unchanged as we execute on our key priorities where we see a clear path to improved profitability and getting back to growth."

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