Fashion e-tailer (BOO:AIM) puts frowns on faces, slumping almost 40% to 23.25p on a full-year profit warning. Heavy UK high street promotions following warm autumn weather have hit growth rates, while today's earnings alert leaves Boohoo languishing at less than half its March 2014 50p issue price.

In a disappointing update covering the four months to December, the pure play online fashion retailer reports 25% sales growth to £50.8 million. This is a halving of the 50% growth delivered in the second quarter and comes in significantly south of consensus.

Despite stepping up marketing spend to stimulate sales, this growth falls well short of the market's lofty expectations. There's also a full-year earnings before interest, taxation, depreciation and amortisation (EBITDA) margin shortfall driving downgrades for the Manchester-based retailer today.

Web chart - Boohoo - Jan 15

Management blames deep discounting by overstocked apparel rivals for clouding the appeal of Boohoo's affordable, 'on-trend' fashion lines, aimed at the social media-savvy youth demographic. Furthermore, 'in light of the prevailing sales momentum in the business', second half growth of 25% is anticipated. In combination with a lower margin outlook, Boohoo's annual profits to February will disappoint. Given this setback for the '24/7 fashion' specialist, all eyes are now turned towards rival ASOS' (ASC:AIM) festive update on Tuesday (13 Jan).

Today's announcement does contain some bright spots. Boohoo enjoyed a record week over 'Black Friday', with investments in warehousing and IT enabling it to handle the surge in demand on home turf and internationally. Boohoo also reports a rebound in 'Rest of World' trading, reflecting the benefits of price cutting, as well as a 31% year-on-year rise in active customer numbers to 2.9 million.

Issue Date: 07 Jan 2015