Boohoo Group Reports Strong FY26 EBITDA Growth and Raises FY27 Guidance

Boohoo Group’s FY26 profit engine revs up, guidance lifted for FY27

Boohoo Group plc – referred to as Debenhams Group in the RNS – has delivered a punchy turnaround update. Adjusted EBITDA came in at £53 million for the year to 28 February 2026, comfortably ahead of the upgraded January guidance and up 36% year on year. The real kicker was the second half: H2 Adjusted EBITDA rose 76%, showing the cost reset and marketplace pivot are biting.

Management is guiding for double-digit Adjusted EBITDA growth in FY27 and expects net debt to fall to under 1x Adjusted EBITDA by year end, helped by improving cash generation and asset disposals. GMV trends are still negative, but improving, with February exiting at -5% year on year and three consecutive quarters of better momentum.

Key figures from Boohoo/Debenhams Group’s trading update

FY26 Adjusted EBITDA	£53m (+36% year on year)
H2 Adjusted EBITDA growth	+76%
GMV trend (Feb exit)	-5% year on year
Net debt (Feb 2026)	£90m (<2x Adjusted EBITDA)
FY27 outlook	Double-digit Adjusted EBITDA growth; net debt expected <1x Adjusted EBITDA
Fixed cost exit rate	£119m (better than £130m guided; down from £175m in FY26); target £100m in FY27
Lease costs	£18m in FY26; c.£13m expected in FY27; c.£6m after US vacant lease exit
Capex	Down from £28m to c.£16m in FY26; c.£8m expected in FY27
Interest cost	£21m in FY26; expected to fall as debt reduces
Depreciation	c.£59m in FY26; c.£20m expected in FY27
Equity raise (Feb 2026)	£40m
Brand profitability	All brands profitable on an Adjusted EBITDA basis

Profitability up, costs down: the turnaround is gaining traction

This update reads like a company executing on a plan. The cost base has been reset, warehouse consolidation finished, the tech re-platform is live, stock has been rightsized, and most onerous costs exited. Those actions are flowing through the P&L, with a strong step-up in H2 profits and a lower fixed cost exit rate of £119 million, better than the £130 million guided only last month.

The goal for FY27 is a leaner £100 million fixed cost base. If achieved, and with GMV stabilising, there is clear operating leverage to support the guided double-digit EBITDA growth.

Marketplace and stock-lite model: capital-light, margin-friendly

The pivot to an asset-lite marketplace is central to this strategy. In plain English: sell more on a platform basis with partners holding the stock, rather than tying up working capital in inventory and heavy infrastructure. That usually means lower capex, better cash conversion, and a faster route to scale.

We can already see the cash discipline coming through. Capex fell from £28 million to around £16 million in FY26 and is expected to be about £8 million in FY27. Depreciation is set to drop to roughly £20 million in FY27 from about £59 million, reflecting a lighter asset base post write-offs and consolidation.

Deleveraging in focus: net debt and cash flow tailwinds

Net debt at year end was £90 million, less than 2x Adjusted EBITDA. Management expects that to fall to under 1x by the end of FY27, supported by operating cash flow and planned disposals. The £40 million fund raise in February 2026 helped accelerate the balance sheet clean-up.

Lease costs are another support. These were £18 million in FY26, dropping to about £13 million in FY27, and then to around £6 million once the vacant US property lease is exited. Interest costs were £21 million in FY26 and are expected to fall as the Group deleverages. Working capital was marginally cash flow positive in FY26 and should improve further as marketplace penetration increases.

Revenue momentum: GMV still negative, but the trend is better

Gross merchandise value (GMV – a proxy for the total value of goods sold through the platform) remains down year on year, but the direction is encouraging. February exited at -5%, marking three consecutive quarters of improvement in the rate of decline. That’s not growth yet, but it’s a sign the worst of the top-line pressure may be passing.

For the equity story, stabilising and then reigniting GMV is the next big test. The heavy lifting on costs appears largely done; now the focus shifts to quality growth on the marketplace model without re-inflating the cost base.

What I like and what to watch

• Positives:
  • Delivery ahead of guidance: £53 million Adjusted EBITDA and a standout H2 performance.
  • Cost-out ahead of plan: fixed cost exit rate of £119 million vs £130 million guided.
  • Clear deleveraging path: net debt at £90 million, with guidance to under 1x EBITDA by year end FY27.
  • Cash discipline: lower capex, lower lease costs, and a pivot that should support free cash flow.
  • All brands profitable on an Adjusted EBITDA basis, suggesting breadth to the improvement.
• Watch items:
  • GMV still negative at -5% in February – growth needs to turn positive to sustain the re-rating.
  • Adjusted EBITDA is unaudited and excludes exceptional items; underlying margin quality will matter.
  • Further gains depend on successful execution of marketplace and planned disposals; timing isn’t disclosed.
  • Interest, lease and exceptional cost reductions are guided, not yet delivered for FY27.

Why this matters for investors

This is a classic early-stage turnaround readout: profits inflecting, costs falling, cash dynamics improving, and guidance edging higher. If GMV stabilises and the Group keeps its cost base disciplined, the operating leverage into FY27 could be meaningful. The shift to asset-lite also makes the business structurally more cash generative, which should support lower net debt and interest costs.

On the flip side, revenue recovery remains the swing factor. Management is clearly confident – guiding to double-digit EBITDA growth – but the market will want to see GMV turn positive and free cash flow come through as promised.

Useful context and definitions

• Adjusted EBITDA: calculated as loss before tax, interest, depreciation, amortisation, share-based payment charges and exceptional items. The figure is unaudited.
• GMV: gross merchandise value – the total value of goods transacted on the platform. It’s a top-line activity indicator rather than a profit measure.
• Not disclosed: revenue, gross margin, operating cash flow figures, and the precise timing/quantum of asset disposals.

Bottom line: momentum is building, execution now moves to growth

Delivery ahead of guidance, stronger profitability in H2, and a tighter cost base give Boohoo/Debenhams Group a solid platform. The FY27 playbook is clear: keep deleveraging, drive marketplace growth, and convert more of that Adjusted EBITDA into cash. If GMV flips to growth while costs stay lean, the turnaround case strengthens materially.

For now, this is a positive step – with the next catalyst likely to be confirmation of improving free cash flow and evidence that top-line momentum is turning the corner.