Shares slump as Asos issues third profit warning
ASOS suffered a wardrobe malfunction with investors yesterday, after the online fashion retailer issued its third profit warning in seven months.
The former stock market darling warned it would need to cut prices across its international markets, including Australia, after the strength of sterling made the price of its clothing less appealing for customers.
Asos already warned earlier this year that it planned to accelerate spending on extending its main warehouse in Barnsley which was destroyed in a fire hitting quarterly sales by £25m-£30m. It plans to build one in Germany, which would also take a toll on profits.
As a result Asos said pre-tax profits next year would be at a similar level to the £45m it expected to report this year. Shares, which were already down 65 per cent in the last six months, tumbled 12 per cent yesterday.
“Historically, we’ve enjoyed much better rates of growth than we’re currently seeing and a large part of the reason for that is that our pricing as a result of the strength of sterling is increasingly out of kilter,” Asos’ founder and chief executive Nick Robertson said yesterday.
The company said sales increased 15 per cent to £240m in the three months to 31 August, lifting full-year sales by 27 per cent to £955.3m.
UK retail sales rose by 33 per cent, having been up 43 per cent in the third quarter, while international sales rose six per cent, compared with 17 per cent previously.