Interim results, 6 months to 31st August 2023 H1 FY24 adj. EBITDA is £31.2m, -12% YoY, versus company compiled H1 consensus at £26.6m, thus EBITDA margins were 4.3%, +30bps YoY (FY23: 3.6%; H1 FY23: 4%; H2 FY23: 3.1%) reflecting improvements in gross margin, distribution cost efficiencies from automation and overhead cost reduction. H1 Group sales were -17% YoY, below consensus expecting -12% YoY and guidance for H1 sales to be down between -10% YoY to -15% YoY. However, revenues in core brands, declined -10% YoY, meaning there were more significant declines in other labels following the decision taken to target more profitable sales. Group P1 sales were down -17% YoY (cc) with a broadly similar trend in P2, at -18% YoY (cc). By geography UK, ROE, USA and ROW P2 YoY (cc) sales were -19%, -18%, -9% and -28% respectively versus P1 YoY (cc) sales at -19%, -14%, -14% and -23%. We note active customers are down -17% YoY and average purchase frequency was -7% YoY. H1 gross margins were up +90bps YoY versus consensus expecting -10bps YoY (H2 FY23: -190bps YoY), with the improvement reflecting tighter inventory management. Pleasingly, inventory is -35% YoY having been -36% YoY at the FY23 Finals. Free cashflow outflow was -£12.9m reflecting capex on strategic projects. As of today, there is £290m of liquidity headroom (previously: £330.9m at the FY23 Finals) on the Group’s £325m RCF. Outlook & view Management now expects full year revenues to decline between -12% YoY and -17% YoY in FY24 (previously: flat YoY and 5% YoY) given slower volume recovery than previously anticipated; pre-statement consensus expects FY24 sales declines of -4% YoY. However, in line with prior guidance, adj. EBITDA margins are expected to be between 4% and 4.5%, versus pre-statement consensus at 4.1%, given progress made on gross margin and cost control. All in all, full year EBITDA is expected to be between £58m to £70m. Pre-statement full year FY24 EBITDA consensus was £70m. Capex is anticipated to be £75m (previously: £80m to £90m). Medium-term guidance remains for adj. EBITDA margins to return to 6% to 8%. While we concede margin headwinds should now start turning into tailwinds, we harbour some concerns about the general health of the boohoo brands, and the setup of a new US warehouse this year will likely not come without operational risks.