British online retailer Boohoo Group Plc (LON:BOO) is on investors’ radar as its shares surged sharply by around 30% last week after struggling for the past 12 months. However, the slowdown in its performance lately has led investors to dump stocks. On March 10, 2022, the fashion retailer announced its results for the fiscal year ended February 28, 2020, in line with market expectations and forecasts.
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Why are Boohoo shares rising?
The online retailer that owns brands like Debenhams and PrettyLittleThings saw its stock price soar as it announced a positive trade update last week.
The online fashion retailer’s share price jumped more than 15% to 91p on Thursday March 10 after the company reported net sales growth of 7% in the fourth quarter through February 28 and 14% for the whole year. Overall, gross sales for this period jumped 26% quarter-on-quarter.
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Not all was positive, however, as the fashion retailer said core sales growth was impacted by higher year-over-year return rates due to a range of products diversified and that the company would continue with the same model through the first half of fiscal 2023. Over the past year, Boohoo shares have fallen nearly 75% from trading above of 330p.
The company reported that over the past few months it has seen more and more customers shopping on its websites, but its international performance is still affected by longer delivery times amid the coronavirus crisis. supply chain.
The retailer recently announced the suspension of its operations in Russia to show its solidarity with Ukraine.
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The fashion retailer has received widespread criticism after it discovered that some of its suppliers were not paying workers minimum wage and in some cases workers were being paid as little as £3.50 an hour. In response, Boohoo has taken steps to improve standards such as terminating contracts with a supplier that does not pay workers minimum wage.
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Additionally, extremely increasing competition in online fashion retail is another concern for the company as it continues to consolidate its market share, which is impacting its share price. Chinese fashion retailer Shein has seen massive growth during the pandemic period. Additionally, the sharp rise in global inflation could prevent consumers from spending their disposable income on things like new clothes and fashion accessories.
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Share price performance
Boohoo Group Plc (LON:BOO) specializes in the design, marketing and sale of products such as clothing, footwear and accessories. It has been listed on the London Stock Exchange since March 14, 2014 and is part of the FTSE AIM 100 index. the market capitalization of the company is £1,166.27 million as of March 17, 2022.
Shares of Boohoo Group Plc were trading at GBX 94.04, up 2.17%, as of 1:54 p.m. (GMT) on March 17, 2022. The stock has returned negative -23.51% since the beginning of the year (YTD) based and over the past year its stock value has depreciated by -71.66%.
Note: The above content constitutes a very preliminary observation or viewpoint based on industry trends and is of limited scope without any fundamental assessment or in-depth technical analysis. Any interest in stocks or sectors should be carefully assessed taking into account the associated risks.