Boohoo Share Discussion Threads

[algorithmicx] 14/1/2020 15:01

A brief comment to flag that there's yet another sparkling update out today from this online fashion multi-brand empire.

It now has multiple brands, which is a brilliant strategy - each one having the group expertise in design, buying, marketing, IT, logistics, etc, applied to it. So far they've all worked. Brands within the group are now: BooHoo, PrettyLittleThing (part owned by the founder's son), Nasty Gal, MissPap, Karen Millen & Coast. Note that the last 2 are targeting an older demographic from the traditional cheap & cheerful youth market.

Sales are strong internationally too.

With multiple brands (more are likely to be added), and a global market, the sky's the limit for this group, in my view. It guides that growth is expected to slow to c.25% in future, as it gets bigger. Still remarkable.

EPS for FY 02/2020 is nudged up 4% today to 5.43p - giving a PER of 61 times - expensive. Or is it? Given that FY 02/2021 is starting shortly, then we should value it on a multiple of forecast 6.75p EPS, reducing the PER to 49 times. Still expensive? Less so, but also bear in mind that BOO tends to beat forecasts. Factor that in, and the PER might be nearer say 40 in reality. That could easily drop to say 25 or 30 times the following year. Which would make it good value for a company with such strong growth & global markets.

BOO is clearly a big long term winner. I'm sorely tempted to buy back in actually, because if we think forwards say 5-10 years, then how many more failed High Street brands will BOO have hoovered up & transformed online? International sales are only scratching the surface of large markets. This could be a £10-20bn mkt cap company on that type of timescale.

I'll wait for a pullback, and then buy back in at some point in 2020.

[telbap] 14/1/2020 13:05

Agreed, but the tipping point is an interesting beast. Once she flips the rules go out the window. Look at the ASOS insanity from the early days. We will see that here, maybe a little more measured, but an explosion nether the less, if it's a biggy, then the sensible thing to do will be sell and wait on the pull back which will happen. All good fun:/)

[algorithmicx] 14/1/2020 13:04

“Of course expectations were high after their positive tone in a statement post Black Friday, but execution continues to be highly impressive,” says Barclays. Here’s their detail:

Core Boohoo revenues of £232.6m (+42% yoy) are 11% above Barclays £209.3m (+28% yoy) and consensus of £209.8mm (+28% yoy); PLT revenues of £190.8m (+32% yoy) are 2% below Barclays £194.6m (+35% yoy) and 5% below company consensus of £200.5m (+39% yoy); Nasty Gal revenues of £41.5m (+102% yoy) are £9m below Barclays £50.3m (+145% yoy) and £2m below company consensus of £43.4m (+110% yoy); and other brand revenues of £8.8m are £5m better than Barclays £4.0m and £3m better than company consensus of £6.1m.

Group gross margins declined c70bps yoy to 53.5% in P3 – c30bps better than Barclays 53.2% and in line with than consensus 53.5%. Core Boohoo GMs declined c20bps yoy, PLT GMs declined c130bps yoy, and Nasty Gal GMs declined c10bps yoy.

Guidance raised, but still looks conservative: The company increased guidance for revenue growth to +40-42% (previously +33-38%) and adj EBITDA margins to 10.0-10.2% (previously “around 10%”). At the midpoint, this implies EBITDA of £122m, 3% higher than company consensus of £118.4m. For P4, this implies between +21-34% growth - this looks conservative to us. If we put c40% for P4 growth and 10.2% EBITDA margin for the year, we would get closer to c£125m EBITDA - if that were to run through to EPS, we would be looking at a potential mid-single digit upgrade to consensus.

[sogoesit] 14/1/2020 11:56

telbap:

My FY2021 assumes 207m revenue for NastyGal (at constant growth based on 10 months' FY2020 multiplied by 1.167 of 108%).

Price (Market Cap) to Revenue History (at 26 April each Year):

FY2017: 7.36
FY2018: 3.54
FY2019: 3.20
FY2020: 3.44 (estimate at 360p sp)
FY2021: 3.00 (estimate at 459p sp)

[telbap] 14/1/2020 11:25

@sogoesit......I think nastygal might be the surprise act for us. 123% increase this year, if we see that again next year we could well look at 200m just there.HarvaThere is an interesting tipping point which might well play out in the good ol US of A. If NG hits that point this year then we could be looking at a revenue explosion ... yummy:)

[cryptotrade] 14/1/2020 11:16

Clearly acquiring businesses helps boo and most businesses grow their bottom line. Good stuff.

[algorithmicx] 14/1/2020 11:08

John Woolfitt, Director of Trading at Atlantic Capital Markets, provided a comment on the results: “Its not all doom and gloom for retail, well at least not if you are operating online.”

“The fast fashion king Boohoo has today hiked guidance after a record quarter and investors will be pleased with the progress the group has made in 2019,” John Woolfitt said.

“The integration of new acquisitions such as Miss Pap, Karen Millen and Coast will add to earnings potential over the coming year to build on what has been a very successful festive trading period.”

“Investors will take results from Boohoo as additional confirmation that if you are investing in the UK retail sector, you have to focus on the online retailers.”

[sogoesit] 14/1/2020 10:58

My rough numbers:
For FY20
Revenue: 1,213m (including about 15m for KM+C)
EBITDA: 108m
EPS: 5.97p
Paying 60x gives a price target of 358p.

Forecast FY21 (at constant growth)
Revenue: 1,773m (including 70m for KM+C)
EBITDA: 157.85m
EPS: 8.73p
Forecast price paying 50x gives 436p.

DYOR

[telbap] 14/1/2020 10:20

Just heard a whisper warehouse are calling all staff to a general meeting. Designers at suppliers factories are being called back to the office. I hope not cos the ramifications around the trade won't be good.

[algorithmicx] 14/1/2020 09:59

Liberum Capital says the aforementioned net cash position is ‘allowing significant reinvestment back into the business to continue strengthening the entire customer proposition (including pricing, product, marketing, delivery) and the group’s systems and infrastructure.

‘Not only this, but it gives room for ongoing M&A and subsequent investment into new brands that can be plugged into, and leverage, the group’s core infrastructure. These bring new customers, extend the demographic and broaden the long-term, addressable market opportunity.’

Boohoo’s chief executive John Lyttle insisted: ‘The newly-acquired brands, MissPap, Karen Millen and Coast, are showing great promise and open different target markets for the group, in line with our strategy to build our multi-brand platform.’

THE EXPERTS’ VIEW

Liberum upgraded its 2020 pre-tax profit estimate by 11.6% to £106m and its 2021 pre-tax profit forecast by 15.3% to £129.6m following today’s update, thundering that ‘boohoo’s business model and operational execution is delivering best-in-class growth and earnings momentum - we had already upgraded EBITDA by 22% over the last year prior to today.’

Reiterating its ‘buy’ rating, Shore Capital said the Boohoo investment case is ‘centred on leveraging the operating platform across the six brands’ and continues to highlight ‘the potential for boohoo group to become the online version of Inditex, with its own stable of eight high street brands (Zara, Pull and Bear…).’

[algorithmicx] 14/1/2020 09:50

AIM-listed online fashion retailer Boohoo advanced 5% to a fresh record high after reporting robust performance in its Christmas trading period and hiking its full-year forecast. "Boohoo continues to defy the broader gloom on the High Street thanks to its appeal among younger shoppers, its tight marketing and laser focus around celebs and social media," Markets.com analyst Neil Wilson remarked.

[ovenman] 14/1/2020 09:34

Boo boo guru will be very busy today, as he said on Jan 2, “ I cannot wait until Jan 14 to short this stock” - enough said

[algorithmicx] 14/1/2020 08:48

Boohoo worth more than Marks & Spencer as sales keep surging

[metis20] 14/1/2020 08:22

Liberium target up from 340p to 370p

[algorithmicx] 14/1/2020 08:13

Caroline Gulliver, analyst at Jefferies, said the performance of boohoo in the UK suggested it has "taken more market share from high street retailers such as New Look, Top Shop and River Island" while the transition from being a single-brand, UK focused retailer into an international player had been "smoothly executed".Over two-fifths of the Aim-traded company's sales now come from outside the UK. 

[inthemix] 14/1/2020 08:12

I'm not bitter, no tune changed. GLA.

[telbap] 14/1/2020 08:05

I the mix 13/01/20....telbap, what makes you think that? Was it the ?3.5 million of sells after 16:30?Changed your tune...

[inthemix] 14/1/2020 08:01

Great results guys!

[telbap] 14/1/2020 07:55

These results tell me that @mix it up.

[bulltradept] 14/1/2020 07:54

Surprised if it didn't hit £3.35 today, margins yes giving back a little, but the rest...

[bookbroker] 14/1/2020 07:50

Might be a good performance, but it’s time companies like Primark, Zara and this took more responsibility for ceasing this cheap throwaway mentality, wear it once and push it on! Nice, glossy products, but it goes to show the wearers are of low mentality without a friggin clue that much of the product they wear is off a synthetic, chemical nature that clogs up the arteries of the planet. So they had better stop pretending they care about the environment, that much is for sure!

[pleaty1] 14/1/2020 07:50

Anyone got access to pre Market, to see what likley open will be