ASOS Sales Growth Slows Amid COVID-19 Uncertainty
- Total sales up 21% in four months to June 30
- Exchanges over the past three weeks are more discreet
- Annual profit forecast in line with expectations
- Stocks slide 14%
LONDON, July 15 (Reuters) – Online fashion retailer ASOS (ASOS.L) warned on Thursday that recent sales growth had slowed as uncertainty over the direction of COVID-19 and poor weather conditions, in especially in Britain, weighed on market demand, sending its shares significantly lower.
Shares of ASOS, which sells fashion aimed at people aged 20 and over, were down 14.1% as of 9:26 a.m. GMT, after the group said sales had risen 21% in the previous four months. on June 30 but were “more moderate” in the last three weeks of the period.
“Uncertainty, especially regarding changes in travel rules and therefore the ability of people to book vacations, means that customers are struggling to plan their lives and their wardrobe choices,” said CEO Nick Beighton to reporters.
He said a non-seasonal summer so far, especially in the UK, has also resulted in unexpected fluctuations in demand.
“One week we saw searches for coats increase by 77% and the following week searches for evening dresses more than doubled,” he said.
ASOS predicted that trade volatility would continue in the near term, given the rapidly changing COVID situation around the world.
As a result, it expects its underlying growth rate for the remainder of its 2020-21 year to be broadly in line with the period of the previous year. He still forecasts adjusted pre-tax profit for the full year in line with his expectations.
ASOS has negotiated multiple coronavirus lockdowns while in-store rivals have had to close their stores.
HIGHER FREIGHT COSTS
Total revenue rose to 1.29 billion pounds ($ 1.79 billion) in the four months to June 30, compared to 1.1 billion pounds in the same period the last year, as its active customer base grew from 1.2 million to 26.1 million.
But the gross margin fell 150 basis points, reflecting unfavorable currency movements, higher freight costs due to the disruption of the global supply chain, and a product mix of categories still weighted by the clothing industry. recreation locked.
He noted that the product line and higher return rates had started to reflect a return to formal wear in recent weeks as COVID restrictions eased.
He said the global pressures on the supply chain were due to global shortages of freight capacity and delivery delays from key supply areas.
Ahead of Thursday’s update, analysts’ average forecast for the full year 2020-21, adjusted pre-tax profit was £ 198m, up from £ 142.1m in 2019-20.
ASOS bought the Topshop, Topman, Miss Selfridge and HIIT brands in February from the directors of Philip Green’s collapsed Arcadia group for £ 265million. Read more
On Monday, it formed a joint venture with US retailer Nordstrom (JWN.N). L4N2OO1PM
($ 1 = 0.7220 pounds)
Reporting by James Davey; Editing by Alistair Smout, Kirsten Donovan
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