boohoo group (DEBS) H1 2025 earnings summary

Executive summary

• New CEO Dan Finley appointed, launching a business review to maximize shareholder value and focus on marketplace models, with a Capital Markets Day planned for Q1 2025.

• Successful equity placing and refinancing completed, strengthening liquidity and supporting growth.

• Cost reduction initiatives delivered £128m in operating cost savings versus H1 FY23, exceeding annualized targets.

• Group GMV pre returns declined 7.3% to £1,176.9m and revenue fell 15% to £619.8m, reflecting challenging market conditions and a shift to a commission-only marketplace model.

• Refinancing completed with existing lenders and a new £222m debt facility secured in October 2024.

Financial highlights

• GMV post returns declined 6% year-over-year, with youth brands down 15.9% and Debenhams Marketplace and Beauty up over 170%.

• Adjusted EBITDA was £20.8m–£21m for H1 FY25, with margin at 3.4% (down 90bps year-over-year).

• Gross margin dropped to 50.7%, impacted by higher returns and discounting.

• Net debt increased to £143m–£143.1m at period end, mainly due to working capital timing and exceptional costs.

• Inventory reduced by £38m to £170m since February 2024; capital expenditure fell to £14.9m–£15m.

Outlook and guidance

• Management targets further cost reductions, stock level decreases, and improved EBITDA margins as the business shifts to an asset-light model.

• H2 FY25 expected to deliver higher GMV and stronger adjusted EBITDA, with continued investment in brands and further cost savings.

• Marketplace growth to remain strong, with ongoing headwinds in Youth Brands; Capex to remain significantly reduced.

• Medium-term targets: Debenhams GMV pre returns >£1.5bn with double-digit EBITDA margin; Youth Brands >£1.8bn GMV pre returns, 6–8% EBITDA margin; Karen Millen double-digit EBITDA margin.

• Capital Markets Day in Q1 2025 will provide detailed strategic updates.