Q2 miss and 2H guided down but a lot is in the price 2Q sales came in 15% below consensus, with the UK swinging back into decline and H1 adj EBITDA was c.GBP2-4m below expectations. In addition, taking a more conservative view of demand for the remainder of FY Feb-23, management lowered its 2H growth and margin expectations. Self-help initiatives, particularly related to sourcing and warehousing remain on track but key unlocks like the US warehouse are still 9 months away. Meanwhile, high shipping costs and slow delivery times are only showing slow improvement, whilst customers are experiencing rising cost-of-living pressures. We cut adj EBITDA c.20-30% but, with shares down heavily in recent months, stay Neutral. UK seeing sharp slowdown whilst most international markets remain weak... Having seen a return to UK growth in May, Boohoo saw a disappointing slowdown with domestic sales falling 8% year-on-year and a weak exit rate cautioned into September. The Rest of World segment saw an encouraging recovery, up 15% yoy, underpinned by the ramp up of wholesale and a rebound in demand in Australia where consumers are responding positively to a return to 4-day delivery lead times. By contrast US sales deteriorated further, down 30% yoy (albeit still +37% vs. 2Q20) with transatlantic delivery times still stuck at 8-10 days detracting from the proposition. We also think competition from the likes of Shein also remains a key issue though, as highlighted in our mindshare and app analysis published earlier this month. ...with slower sales weighing on margins despite an improved inventory position Boohoo now expects full year sales to decline c.10% with resulting deleverage of costs leading to a 3-5% adj EBITDA margin vs. 6.3% last year and 10.2% pre-pandemic. This implies a EBITDA range of GBP54-89m. We cut our own adj EBITDA forecast to GBP61m, also lowering outer year expectations given likelihood of protracted soft demand and inflationary cost...