Boohoo Shares Are Up 54% YTD on Positive Sentiment. What’s Next?

The Boohoo Group PLC (LON: BOO) share price has risen 54% this year as investor sentiment towards the fast fashion company. The surge in Boohoo shares is driven by multiple factors, including its executives' revamped share incentive plan and its results for the four months to December 2022.

Boohoo is expected to release its results for the financial year that ended on 28 February 2023 in May, and many are looking forward to the release. Meanwhile, the rally in Boohoo shares could be attributed to a shift in investor preferences towards riskier assets such as growth stocks like Boohoo.

In the past, I have pointed out that the decisions made by Boohoo over the past two years since the Leicester City sweatshop scandal would pay off in later years as the company took massive steps to revamp its supply chain, cutting out suppliers with dubious practices and exerting more control over its suppliers. 

As a result, Boohoo has started reaping the benefits of its transparency about its operations, including sourcing the fast fashion items that have endeared it to its target consumers, young people. The company now has sustainable operations and can use this as a crucial marketing point in a world where many people are concerned about the environmental impact of their decisions. 

I have also argued that Boohoo’s competitor Shein may lose customers if it maintains its opaque supply chain practices. The Chinese fast fashion company has been accused of using sweatshop labour, which is hard to ignore given the opaque nature of its supply chain. 

Boohoo shares just broke above a crucial resistance zone, and it will be interesting to see if the shares can hold above this level next week. If not, we could see a pullback and maybe another attempt to break the level, given the positive momentum driving the shares higher. 

The company recently unveiled a new share compensation plan for its executives on 14 February 2023 to motivate them to keep creating more value for shareholders. Many hope that the plan will work. 

*This is not investment advice. 

Boohoo share price. 

The Boohoo share price has risen 53.96% this year as investor sentiment shifts in favour of the firm.