June 12, 2019 / 7:23 AM / 5 days ago

BUZZ-Boohoo Group: Slips as disappointing margins takes shine off robust sales

** Online fashion group’s shares Boohoo Group Plc down 3.8% despite robust Q1 sales as lower margins disappoint investors

** Gross margin in qtr was 55% vs 55.2%

** Against tough comparisons, gross margin fell just 16bps and the company has room to invest should it need to - Jefferies

** Q1 gross margin for PrettyLittleThing division fell to 55.9% vs 58.7%

** Co bucks tough retail market with robust sales growth in Q1 as its offer of cheap clothing, delivered quickly, chimed with shoppers

** Maintains guidance for FY 2019-20 of rev growth 25%-30% with core profit margin of ~10%

** Jefferies hikes BOOH’s PT to 300p as it believe strategy working well, with growth spread between new customers and repeat purchases

** Up to Tuesday’s close, stock had risen ~42% vs peer ASOS’ ~44% gain, while Ted Baker slumps ~38% for same period (Reporting by Yadarisa Shabong in Bengaluru)

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