Boohoo (LON: BOO) share price continued its sell-off on Tuesday after the company published weak financial results. The stock crashed to a low of 28.40p, the lowest level since September 2015. It has plunged by more than 93% from the highest point during the pandemic.

I recently wrote about Boohoo, the popular fast-fashion British company. In that article, I predicted that the stock would see more volatility on October 3rd after publishing its financial results. 

This forecast was accurate as the stock tumbled by more than 10% on Tuesday. In a statement, the company said that its revenue for the six months to end of August tumbled from over £882 million in FY23 to £729 million. 

Like Asos, Boohoo’s results showed that the fast fashion industry is not doing well. Its gross profit dropped from over £464 million to £389 million. Its adjusted EBITDA retreated from £35 million to £31 million. 

Worse, Boohoo believes that the company’s weakness will continue. It believes that its revenue will crash by between 12% and 17% while its adjusted EBITDA margins will be between 4% and 4.5%. Its capital expenditures will be about £75 million.

Most importantly, the rising inflation has reduced how people shop in its platform. Its active customers have crashed by 12% to 17 million while the number of orders fell to 23.2 million. The frequency of orders and average order value have also fallen.

Therefore, it seems like Boohoo’s turnaround is not working as fast as expected. It also appears that external factors like high inflation are slowing the momentum. This is evidenced by the sharp web traffic to Boohoo’s website. Data shows that the website in August dropped by 13% to 14.1 million from 16.2 million in July. 

The daily chart shows that the BOO stock price formed a small double-top pattern at 39.73p between August and September. In technical analysis, this pattern is one of the most popular bearish signs.

Boohoo shares have now crashed below the key support at 31.86p, the neckline of the double-top, and the lowest point between June and July. The stock also plunged below the psychological level at 30.05p (September 2022 low). It remains below the 50-day moving average.

Therefore, the shares will likely continue falling, with the next key psychological level to watch being at 25p.

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