Boohoo share price is at risk as Revolution Beauty crisis escalates

July 05, 2023 08:30 AM PDT | By Invezz

Boohoo share price is at risk as Revolution Beauty crisis escalates — Image source: Invezz

Revolution Beauty headwinds

One of the biggest retail news stories recently is about the relationship between Boohoo and Revolution Beauty. In the past few months, Boohoo, which owns ~26.6% of Revolution, has been campaigning for a management change. Boohoo also attempted to remove Bob Halt, the company’s management.

Revolution Beauty has been one of the most embattled British companies recently. Its stock was halted in 2022 as the company conducted a deep audit of its operations. That audit found that the company had overstated its sales by 9 million pounds. Also, its founders took loans worth 11 million pounds without approval.

These challenges come at a time when Boohoo’s business is going through major headwinds as demand slows and costs rise. In June, the company said that its business operations were improving and that it expects that it will become profitable later this year.

Boohoo also reported results that were better than estimates. Its EBITDA for the year to February 28 came in at 63.3 million pounds as revenue dropped by 11% to 1.77 billion pounds. In its forward guidance, the company said that its revenue for this financial year will be flat to down 5%.

Boohoo share price forecast

BOO chart by TradingView

Boohoo stock price has been in a strong bearish trend in the past few months. The shares have remained below the 50-day and 100-day volume-weighted moving averages (VWMA), signaling that bears are in control.

Boohoo has also formed two extremely bearish chart patterns. It has formed a bearish pennant pattern, which is shown in orange. Also, the stock has formed what looks like an inverted cup and handle pattern.

The lower side of this C&H pattern is at 32.74p. Therefore, there is a likelihood that the shares will soon have a bearish breakout as sellers target the next psychological level at 30p. A move below that level will see it drop to the next key support at 25p. This bearish view will be invalidated if the price moves above the key resistance point at 37.53p.

The post Boohoo share price is at risk as Revolution Beauty crisis escalates appeared first on Invezz.

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