We still have a month to go before the year ends. But we should be on for £50m in adjusted EBITDA. That’s a significant boost to the guidance of £45m offered at first-half results time.

Boohoo had been considering selling off its PrettyLittleThing (PLT) operation. But that’s off the table now. The board is “particularly pleased with the pace and scale of PLT’s turnaround and the resulting material improvement in profitability.”

Debt has been a problem as Boohoo has been working on its turnaround plans. The net figure was, however, down 22% to £111m at the end of the first half in August.

This time the company says it’s “exploring significant licensing opportunities and continues to advance the sale of non-core assets, which would materially reduce the net debt in the next 12 months.“

That would mark some major progress and reduce one of the key risks investors are currently contending with. We should hear further details in March.

Back to profit soon?

This latest progress could bring one important advance. Analyst forecasts still show a bottom-line loss per share happening as far as 2028. But the mooted 2028 loss figure of a mere 0.3p is only a shade short of breakeven.

I’m now seeing an odds-on chance of positive earnings per share in 2028. Or at the current rate of progress perhaps even earlier?

Crucially, it’s increasingly looking like one key driving force is turning positive. And that’s investor sentiment. Since a 52-week low of 10.3p in November 2025, the Boohoo share price has now gained 146% — standing at over 25p at the time of writing.

Strategic shift

I see this as testament to Boohoo’s repositioning. It’s moving from concentrating on its own-brand labels to providing a platform for goods from a wide range of partners.

At H1 time, the company said: “Our marketplace model is at the heart of our go-forward business. It is stock-lite, capital-lite, margin-rich and highly cash generative.” And it pointed out: “There are now c.20k partners in our ecosystem (up from c.10k a year ago) and we see significant further partner growth potential.”

That’s what I’m going to be looking for when we get our eyes on the full-year results. And I’ll be keeping a check for possible forecast upgrades too.

Time to buy again?

I’m still a good way from breaking even on my Boohoo Group holding. And I still see fears over the likelihood of sustained revenue growth. But I’ve moved on from thinking my shares are close to worthless. Yet I won’t consider buying more until I see further progress.

The post Here’s why new profit guidance just gave the Boohoo share price a 7% boost appeared first on The Motley Fool UK.

So what does it look like now the excitement has settled a bit? Is is the start of a long-awaited climb back to health, or are investors jumping in too soon?

Following years of disappointing results, the figures for the first six months of the year showed some impressive progress. Revenue did continue to decline. But slashing operating costs helped stem the company’s losses.

Boohoo’s statutory loss after tax in the half came in at just £3.4m — a 97% improvement from £127m the same time a year ago. That was from continuing operations, mind. But I reckon that’s what matters most. And even the total after-tax loss was slashed 89% to £14.7m.

Marketplace

Boohoo — now trading as Debenhams — told us: “Our marketplace model is at the heart of our go forward business. It is stock lite, capital lite, margin rich and highly cash generative“.

What does that mean? It’s all about connecting the company’s online sales platform to goods from a wide range of partners. The old idea of one company only selling its own stuff online is fading. And Boohoo added: “There are now c.20k partners in our ecosystem (up from c.10k a year ago) and we see significant further partner growth potential“.

My own Boohoo holding has plummeted in value since my ill-timed purchases a few years ago. If we really might be on the cusp of a dramatic turnaround, am I rushing out to buy more while the Boohoo share price is still relatively cheap?

Reasons to be careful

No, for a few reasons. Firstly, now the initial excitement’s calmed down a bit, there’s still one crucial fact. This is still a loss-making company. And I’m wary of buying anything not making profits, unless the proposition looks truly exceptional.

Then there’s the first-half revenue fall. I expect it could take some time for Boohoo’s steady revenue levels to establish. But the half saw a 23% fall, and that’s significant. Gross margin dipped a bit too, by 60 basis points.

There was something else nagging at the back of my mind… Oh yes, that’s it… Mike Ashley. Ashley-backed Frasers Group owns around 30% of Boohoo. And the Boohoo board decided to bypass a shareholder vote to approve its new turnaround scheme — which essentially consists of huge bonuses for the bosses if they hit some stretching targets.

Unhappy shareholder?

It’s all apparently above board in terms of AIM regulations. But I suspect Ashley might not be overly pleased at having no say in the executive bonuses decision. He’s not a man I’d want to be on the opposite side of in any possible future corporate governance battle.

On balance, yes, I think Boohoo has to be worth considering now. But I want to see progress on a number of fronts before I’ll come close to putting down any more cash.

The post What next after the Boohoo share price exploded 98%? appeared first on The Motley Fool UK.

There are good reasons for optimism. Aggressive cost-cutting measures are starting to bear fruit. What’s more, the AIM-listed firm’s transition to a marketplace model across all divisions appears to be the right strategy.

But are these factors enough to sustain an enduring share price recovery amid bitter corporate governance tensions and continued revenue declines? I’m not so sure. Here’s why.

Turnaround triumphs

Let’s start with the undeniably impressive highlights. Post-tax statutory losses have almost been eradicated, falling from £126.7m to just £3.4m.

Moreover, underlying operating profit turned positive, coming in at £2m following a £9m loss in the previous period. And the balance sheet‘s also in better shape, thanks to a £32m net debt reduction to £111m. These are significant achievements.

The revival’s being driven by CEO Dan Finley’s shift to a marketplace-led model. This new framework now represents 32% of the group’s gross merchandise value – up from 19% a year earlier.

In essence, the aim is to shift the company from a traditional online retail structure, where the business holds and sells its own inventory, to a platform that connects third-party sellers with customers, like Amazon does. The board punchily describes this as “stock-lite, capital-lite, margin-rich and highly cash generative“.

With marketplace partners doubling to 20,000 in a year, growth is gathering pace. Promisingly, all five group brands — Boohoo, boohooMAN, PrettyLittleThing, Karen Millen, and Debenhams — are now marketplace-enabled with proprietary technology.

Flies in the ointment

Despite encouraging progress, I think the Boohoo share price could ultimately come under further pressure. Let’s not forget we’re still talking about a loss-making enterprise here. Worryingly, revenue declined by 23% to £297m. The company’s not out of the woods yet.

Furthermore, the group is locked in a bitter feud with its biggest shareholder. Mike Ashley’s Frasers Group owns nearly 30% of Boohoo shares. In an unorthodox move, Boohoo Group has bypassed investors by not putting a new management incentive plan to a shareholder vote. CEO Dan Finley stands to receive a whopping £150m payout if he can lift the valuation to £4.2bn.

This comes after Ashley demanded the suspension of founder and executive vice chair Mahmud Kamani from the board just a few months ago. He also opposed the Debenhams rebranding earlier this year.

As the dispute trundles on, there’s a risk this could all end in tears for Boohoo if Ashley chooses to instigate shareholder rebellions, disrupt future strategic moves, launch a hostile takeover bid, or pursue litigation. These risks shouldn’t be ignored lightly, as any Newcastle United supporter can attest to.

The bottom line

I’m pleased to see Boohoo Group taking steps in the right direction. The successful execution of key strategic goals should be commended. However, half-year earnings were hardly flawless, and acute corporate governance risks should be at the forefront of potential investors’ minds.

There’s a lot more to like about Boohoo shares today, but not enough for me to invest at present.

The post How on earth has the Boohoo share price exploded 88% since yesterday? appeared first on The Motley Fool UK.

I’m currently in the market for a UK turnaround stock. So, should I buy Boohoo at 18p?

Marketplace model starting to bear fruit

Yesterday’s share price jump was the biggest since 2020. Back then, the online fashion retailer was enjoying a surge in sales during Covid lockdowns. Then, as the pandemic eased, it was hit with soaring inflation, a cost-of-living crisis, and intense competition from Shein and reopened physical stores.

Consequently, Boohoo’s wafer-thin operating margins and low pricing power were brutally exposed, tipping the firm into the red. The share price collapsed and has been going down ever since.

But a half-year report yesterday suggested a turnaround is under way, with profitability (on an adjusted EBITDA basis) returning across all of its brands. Progress is being driven by the group’s pivot to a capital-light marketplace model, which allows third-party brands to sell products on its apps in exchange for a cut.

As such, total revenue fell 23% to £297m, but the statutory post-tax loss for continuing operations reduced significantly, from £126.7m to £3.4m. Meanwhile, net debt was down to £111m from £143m.

Debenhams was the standout performer, with gross merchandise volume (GMV) rising 20% to £318.8m. And management says it has line of sight to Debenhams delivering £1bn GMV and EBITDA of at least £50m inside three years.

Other brands like MAN, PrettyLittleThing and Karen Millen aren’t doing as well as Debenhams. But these are also now fully marketplace-enabled, putting the “foundations in place for their next phase of growth“.

Meanwhile, the brands have joined the online marketplaces of Macy’s and Nordstrom. They have over 46.5m social media followers.

This is a multi-year journey, and we have a clear plan and the right model in place. We are transforming into a lean, tech-enabled, best in class online platform business. CEO Dan Finley.

Somewhat confusingly, the group operates as Debenhams, though the stock still trades as Boohoo. But it intends to formally change the name of Boohoo Group to Debenhams, if shareholders approve. Though a new management bonus plan apparently doesn’t need approval.

Should I buy Boohoo stock?

I’ve been very bearish on the stock for many years now. And intense competition from larger fashion marketplaces like Shein, Next, and Amazon still worries me.

Yet the capital-light marketplace model that’s emerging does seem promising. The company says the fixed cost base will soon be reduced to around £100m, down from £292m in February 2024.

With losses shrinking, and management embarking on investor roadshows to explain the new strategy, money might start flowing into the stock again.

As such, the shares might prove to be undervalued at 18p. The forward price-to-sales ratio here is still just 0.17.

What new-ish CEO Dan Finley did at Debenhams was a minor miracle. If he can replicate that success elsewhere across the business, then the stock should recover well.

Personally though, I need more evidence that the turnaround is genuine. Boohoo is still loss-making overall, making this far from a no-brainer.

But I think this small-cap stock now at least deserves a place on investors’ watchlists at 18p.

The post Up 57% in a day! Is Boohoo now a no-brainer value stock at 18p? appeared first on The Motley Fool UK.

First-half results released Thursday (27 November) were accompanied by news of a Group Turnaround Scheme (GTS), aimed at incentivising executives and senior management over the next five years.

Should the full GTS target be reached, the maximum value of awards would reach £222m. And that would mean a 5% dilution for existing shareholders. But to get that much, the Boohoo share price would need to reach 300p. And that’s 25.9 times the closing price the day before the announcement.

Shareholder approval is apparently not needed for the new plan.

First half

In the six months to 31 August, it looks like Boohoo managed to stem its losses significantly. Continuing operations saw a reported £3.4m loss after tax, way better than the £127m loss recorded in the first half last year. And the group’s total loss after tax of £14.7m compares impressively to £139m a year ago.

It’s not all sunshine and roses yet though. Total revenue fell 23% to £297m (impacted by the shift to a marketplace model), with gross profit down 24% to £157m. And free cash flow, while a lot better than the £38.9m outflow in H1 last year, was still negative at £22.1m.

CEO Dan Finley said: “This is a multi-year journey, and we have a clear plan and the right model in place. We are transforming into a lean, tech-enabled, best in class online platform business. The momentum we have built in the first half sets us up well for the remainder of FY26 and we expect Adjusted EBITDA to be ahead of last year.”

The way forward

I think this really could be a pivotal moment for Boohoo. But I’m not convinced its time for celebratory fanfare just yet.

This set of interim results is better than I was expecting. But a lot of the progress comes from cost-cutting over the past year and more. We’ve seen disposals and we’ve seen job cuts. And the latest figures show a 27% fall in operating costs with capital expenditure cut 50%.

Getting costs down in the chase for profitability is a good start. But what comes next really counts. Is there any way Boohoo can get back to being the growth stock darling of old?

Verdict?

The rebranding to Debenhams has to be a positive move — ditch the name associated with failure. But it’ll need more than that to get anywhere near a 25-bagger in five years. Never mind the three-bagger needed to even get on the first rung of the turnaround scheme laddeer.

Forecasts had showed losses at Boohoo falling slowly in the years to 2028. I expect they’ll need to be upgraded now. And any sign of forecast profit could give the shares a boost.

I notice CFO Phil Ellis and a couple of non-executive directors snapped up around 660,000 Boohoo shares between them in September. They’re already in profit. But for me, I’m holding and taking a wait and see approach.

The post As the Boohoo share price jumps 50%, is it the start of a stunning recovery? appeared first on The Motley Fool UK.

Simple but powerful

That quote is: “When forced to choose, I will not trade even a night’s sleep for the chance of extra profits”.

What does he mean by this? First notice that Buffett is imagining a situation where he has a choice.

Sometimes, for whatever reason, we own a share that does worse than expected but do not feel we really have much choice about selling it. Sometimes people decide to hang onto a share out of actual obligation, or a sense of obligation because they do not want to sell at a loss.

That can be a mistake: putting off turning a big paper loss into an actual loss can have a big opportunity cost. Indeed, that is exactly what Warren Buffett did after buying Berkshire Hathaway, then a floundering textile business.

But the bigger point in this quotation is about risk tolerance. How much extra risk ought to be taken in order to gain extra possible reward? Buffett’s answer is simple: not so much that it stops him sleeping, even once. But I think it is brilliant.

Applying this advice in real life

That might sound like a metaphor, but I think Buffett is talking literally. Most people have been kept awake at night at one point or another by something that is worrying them. That can include concern about an investment — and can be a real problem.

For several years, I owned shares in retailer boohoo (LSE:DEBS). When I invested, boohoo had run into some problems. I should have paid more attention to them. As Buffett also says, there is rarely only one cockroach in a kitchen.

But I was attracted by its previous success. It had a proven business model, had been very profitable and had a large customer base.

But over time, the boohoo share price fell and fell.

I hung on, hoping for recovery. It may still come. The retailer owns some popular brands and has been taking steps to try and turn around its business.

However, each time I looked at my boohoo holding again I was getting more concerned about the long-term direction of the business. That was not yet keeping me awake at night. But it did concern me whenever I thought about it in detail and I decided to sell my boohoo shares and cut my losses.

Investing and emotions don’t mix well

That was not a pleasing thing to do. But it did mean that I never got to the stage of losing sleep over my boohoo shares.

Like Buffett, I try to keep my emotions from damaging my investing decisions. I would rather get a good night’s sleep, even if it means missing out on some more potential rewards.

The post Warren Buffett’s thinking on risky shares is simple, but brilliant appeared first on The Motley Fool UK.

Here are three potentially costly mistakes to try and avoid when weighing how to invest in an ISA!

Give value traps a wide berth

When a share has got a lot cheaper and looks almost too good to be true, sometimes it is. That is exactly the mistake I made when buying some boohoo (LSE: DEBS) shares for my ISA a few years ago. The company had been making tidy profits, had a large customer base and owned some well-known digital retail platforms.

But the share price had tumbled. I saw that as a buying opportunity. However, I would have a bigger ISA today if I had taken more time to ask myself why the price had been falling steeply. Did other investors see something I did not?

Yes they did. In fact, perhaps multiple things. The impact of low-cost rivals like Shein and Temu was a risk I had not fully considered when adding boohoo to my ISA.

The company’s US expansion was another thing I got wrong. I saw it as a chance to scale the business model. But, like many British retailers before it, expanding Stateside was a costly misadventure for boohoo.

I sold my boohoo shares at a steep loss and they have continued to lose value since, although a turnaround could see them rising again.

Value traps are traps precisely because they look attractive. But often that is based on paying too much attention to a company’s past performance — and not enough to how its marketplace is evolving.

Too much of a bad thing

Although selling my boohoo shares was painful, it did not sink my ISA. Fortunately for me, it was only one of the shares I owned. In fact, I always make a point to keep my ISA diversified.

Even smart investors can make the mistake of not diversifying their ISA enough. Sometimes, one share seems so compelling it can be tempting to put aside normal rules and keep buying.

Another way to fall into this trap is simply by doing nothing. A share that is only 5% or 10% of an ISA’s value might soar so much that it ends up representing 50%, 60% or even more of the ISA.

The problem is that, no matter how brilliant a company is, it can always run into unexpected problems. That is why diversification always matters.

Throwing away money needlessly on fees

Another mistake some investors make when it comes to their ISA is paying more fees and higher commission than they need to. That is not just about finding the right ISA in the beginning. Fees and commissions can creep up over time, changing the attractiveness of a given ISA provider.

So I think a savvy investor will check from time to time whether they are still using the right Stocks and Shares ISA for their individual needs.

The post 3 costly ISA mistakes to avoid appeared first on The Motley Fool UK.

The five-year returns are even more shocking. Over this timeframe, the ASOS share price has crashed 94%, while boohoo’s has cratered by 95%. The latter’s market-cap is now just £195m, putting it into the bottom half of the FTSE AIM 100 Index.

Losing market share

The reason for these crashes is twofold. First, the UK was in the middle of the pandemic in mid-2020, a time when online shopping was booming. However, the level of growth the two firms was enjoying was unsustainable as the world returned to post-Covid normality.

Second, both companies have struggled due to competition, particularly from Shein and Temu (owned by PDD). Fickle Gen Z shoppers continue to be wowed by Shein’s ultra-low prices and fast-turnaround supply chain.

Inflation and the cost of living also rose following the pandemic, putting pressure on consumer spending. And this probably helped Shein, as cash-strapped shoppers sought out the shiny bargains its app’s famous for.

This threat isn’t going away. Last year, Shein logged £2.05bn in UK sales, a 32% increase over 2023. That was more than boohoo (£1.22bn) and not far off ASOS (£2.7bn is forecast for its current fiscal year). Meanwhile, pre-tax profit surged 56.6% to £38.25m.

This growth strongly suggests that the Asian fast fashion giant continues to gain market share in the UK. Especially as both ASOS and boohoo have been reporting declining sales.

Chancellor to the rescue?

Shein’s model involves shipping directly from China in thousands of small parcels rather than bulk-shipping containers to warehouses. And because each parcel’s generally under £135 – a couple of dresses might only cost £20 – it avoids duties and taxes.

Hence why Shein can afford to sell clothes at rock-bottom prices. However, this de minimis exemption for low-value imports has been scrapped in the US and EU. And Chancellor Rachel Reeves said in April that she’s considering changing the tax break in the UK. 

If the government does, it’ll likely be announced in the Autumn Statement. And looking at Shein’s UK profit margin, I’d imagine the fast fashion company would immediately have to raise prices.

Needless to say, this would be positive for both ASOS and boohoo. It would level the playing field somewhat, and could even lure back customers (though US tariffs are still negative for exports).

Will Reeves do this? Well, Gen Z shoppers might not want her to because it could lead to noticeably higher prices. But British retailers have been crying out for it. B&Q boss Graham Bell recently said the de minimis rule was “killing the high street more than anything”.

My guess is that this tax break will be scrapped. If so, it could be positive for the ASOS and boohoo share prices.

Should I invest then?

Looking ahead however, both firms are still expected to continue posting losses, albeit at a reduced pace due to cost-cutting measures.

Personally, I don’t find fast fashion an attractive area to invest in because cut-throat competition results in wafer-thin margins. So I think there are better stocks out there for my portfolio today.

The post Will Rachel Reeves help rescue these 2 struggling FTSE stocks? appeared first on The Motley Fool UK.

But while rising share prices and dividends could help to create wealth in an ISA, there are also factors that can destroy it.

That is why I try to avoid this trio of common traps when investing.

Getting too excited about one share

Imagine this scenario.

You buy a share you think is brilliant and it goes up a lot. So you buy more – and it goes up further. Excited, you buy even more – and it goes up again.

This is both bad and good, in my view. Clearly the increase in value is good – so what’s bad? The lack of diversification in the ISA.

More and more money being put into one share makes the ISA less diversified. Meanwhile, that share’s rising value means it comes to represent a larger and larger percentage of the overall portfolio.

That can happen to anyone – Warren Buffett’s Apple stake came to dominate his portfolio at one point precisely because the price had risen so far.

Buffett then sold lots of Apple shares, although by hanging on to many he suggested that this was not because he had lost faith in the investment case.

No matter how compelling one share may seem, any smart investor always stays diversified. Even the best companies can run into unexpected business challenges.

Chasing yield regardless of its source

A lot of ISA investors (and I include myself in this) like the passive income potential of a portfolio stuffed with dividend shares.

With a £20k portfolio, the current average FTSE 100 yield of 3.4% would mean annual passive income streams of £680. But a 5% yield would mean £1,000, while a 10% yield would mean £2,000.

The appeal of high yields is easy to understand. It can be addictive.

But as an investor, it is important always to remember that dividends are never guaranteed.

So instead of fixating on a share’s current yield, I try to look at its business prospects and assess what sort of yield I think it may be able to support in future.

Throwing good money after bad

I recently sold all my shares in Boohoo Group (LSE: DEBS). That was a painful decision to make, as not only did I sell for much less than I originally paid, but I also had to consider why I had squandered some of the money in my ISA to buy such a dog.

The reason was that, when I bought, Boohoo had proven its business model, had previously been profitable, was sitting on spare cash and had a strong brand and large user base.

Some of those potential strengths are still true and could help fuel a turnaround. But Boohoo has had an awful few years, losing money hand over fist while battling a downwards sales trend.

Finally I decided to cut my losses. But maybe I should have done that after my first purchase, rather than buying more shares when the price fell.

Badly chosen shares are not the only way one can waste money in an ISA: paying unnecessary fees and charges is another.

So, it pays to pick smartly when using a Stocks and Shares ISA to try to build wealth.

The post 3 basic but costly ISA mistakes to avoid appeared first on The Motley Fool UK.

But millions of people are not making the most of the opportunities a SIPP potentially offers them. Here are three positive moves they could make to try and change that.

1. Put in more money

Lots of investors obsess about the annual contribution allowance for their Stocks and Shares ISA.

Yet many do not seem to pay anything like as much attention to the question of how much they can, or ought, to put into their SIPP each year.

An ISA and a SIPP are different financial vehicles. Once money is put into a SIPP, it is typically locked in until a certain age, so cannot be as easily withdrawn as is the case with an ISA.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

But clearly, one way to build a bigger SIPP in the long term is to put more money in along the way.

2. Get time to work for you, not against you

When is the right time to make such contributions?

Each investor’s situation is unique. But, in general, when it comes to contributing to a SIPP and putting the money to work my approach is the sooner, the better. That presumes, of course, that there are attractive enough opportunities at a given moment.

How much difference does it make to a SIPP if an investor acts now, not later, when funding it and putting it to work?

To illustrate, imagine a £100,000 SIPP that grows at a compound annual rate of 5%.

On a 10-year timescale, that would be worth nearly £163k. If the timeframe is 20 years, that would be over £265k. For 30 years, the value jumps to £432k, while a 40-year investment horizon would turn the £100k into almost £704k.

Remember, the only difference here is timeline. The sooner one gets serious about a SIPP, the more opportunity there is to grow its value.

3. Think about and invest for the long term

When it comes to investing, I favour the long-term approach not only for my SIPP but in general.

The benefits of that can be seen from the compounding example above. But it is important to remember that not all shares do well over time. Some go nowhere, while others actually destroy value.

For example, I still own shares in boohoo (LSE: DEBS) but have recently reduced my stake, making a painful loss in the process.

What went wrong? When I invested, boohoo was coming off a few profitable years, had a good growth story, and looked set to grow its international customer base.

But I perhaps made the classic mistake of paying too much attention to the company’s past performance rather than its future prospects. With a low-cost offering, boohoo was always going to be vulnerable to very cheap rivals like Shein.

Meanwhile, the environmental impact of fast fashion has become a bigger public issue, meaning that the basic business model has come into question.

I have not completely thrown in the towel. boohoo does have a large customer base, some powerful brands and ambition to fix its business. But I think I made a mistake here by thinking too little about the decades-long outlook a smart SIPP investor considers.

The post 3 techniques to turbocharge your SIPP for a richer retirement! appeared first on The Motley Fool UK.