Boohoo (LSE:DEBS) delivered a positive first‑quarter trading update with gross merchandise value up 0.5% and that the result leaves full‑year guidance intact, that's the view of Aarin Chiekrie, equity analyst at Hargreaves Lansdown.
Chiekrie attributes the improvement to Boohoo's pivot to a marketplace model, the online fast‑fashion retailer's strategy to scale sales by onboarding third‑party sellers and removing inventory and fulfilment costs from the group.
The analyst notes underlying cash profit (EBITDA) margin expanded "materially" over the period, around 25,000 brands have joined the group's ecosystem, and Boohoo expects double‑digit underlying cash profit growth and positive free cash flows this year.
"Longer‑term success will rely on driving stronger top‑line growth, which isn’t guaranteed in the competitive retail industry," Chiekrie says.
