Sales at the online retailer - which has partnered with celebrities from Megan Fox to Jack Grealish and also owns PrettyLittleThing - were down 11% to £1.77 billion. At the same time, margins were down, meaning the business swung from a £7.8 million profit last year to a £90.7 million loss.
Josh Warner, market analyst at City Index, said: “What a rough year for Boohoo. Sales fell by a double-digit percentage and adjusted Ebitda halved as it struggled with higher costs and excess inventory.
“Boohoo must now rebuild profitability and return to growth, but investors will have to wait to see any noticeable improvement considering it expects sales to be down another 10% to 15% in the first half of the new financial year.”
But shares were up 15.6% to 44.4p as boss John Lyttle laid out Boohoo’s ‘back to growth strategy’. That strategy will involve attempting to reduce its rate of returns “whilst not impacting our customer experience”, while also looking for ways to reduce costs in all areas, which may include workforce costs.
Sarah Riding, retail partner at Gowling WLG, said there is still a clear path back to growth.
“Investors still have much to be hopeful for though as boohoo has proven it can return a significant profit and still has a large customer base, especially amongst younger generations who prefer the convenience of online shopping,” she said. “If the company can successfully close the gap on its margins while surviving the current pressures, then it's likely to get itself back to growth.”
In February, Boohoo changed its bonus plan for top executives including Lyttle after determining its previous targets were so hard to reach that the existing plan had “little or no value”.