18th Jul 2019 13:03
(Alliance News) - Online fashion retailer ASOS PLC said on Thursday it has reduced its profit expectations for the financial year after warehouses issues affected sales in Europe and the US, despite "robust growth" elsewhere.
Shares in ASOS were 17% lower at 2,272.00 pence in London on Thursday.
Meanwhile, ASOS Chair Adam Crozier took the opportunity to buy shares in the AIM-listed firm amid the stock price fall.
Total revenue for the four months to June, which includes not just retail sales but delivery fees and third-party income, rose 12% year-on-year to GBP919.8 million from GBP823.9 million.
The company's total retail sales in the period increased 11% to GBP894.0 million from GBP802.7 million.
The company's UK retail sales during the four month period jumped 16% to GBP334.1 million from GBP288.0 million and in the Rest of the World by 14% to GBP169.5 million from GBP149.2 million.
Europe had a sales rise of 5% to GBP269.0 million from GBP257.4 million, while the US - though like Europe affected by operational issues - had a 12% rise to GBP121.4 million from GBP108.1 million.
The company said the overhaul of its warehouse operations in Berlin and Atlanta which is due to be completed by the end of September, hindered sales in the two regions.
As a result, it has reduced its expectations for the financial year. It now expects group sales growth in line with the year to date, which in the first ten months of its financial year ending August 31 grew 13%.
ASOS now forecasts a pretax profit between GBP30.0 and GBP35.0 million, a sharp fall on financial 2018's GBP102.0 million.
Chief Executive Nick Beighton said: "Whilst we are making good progress in improving customer engagement, our recent performance in the Europe and the US was held back by operational issues associated with our transformational warehouse programmes.
"Embedding the change from the major overhaul of infrastructure and technology in our US and European warehouses has taken longer than we had anticipated, impacting our stock availability, sales and cost base in these regions. Where we have been unencumbered by these issues we have seen robust growth and overall our customer momentum is improving with the business hitting 20 million active customers globally for the first time."
Later on Thursday, ASOS announced Chair Adam Crozier bought shares worth GBP100,124 in the online clothing retailer following shares diving after the profit warning.
Crozier - chair since July 2018, having previously been chief executive at Royal Mail PLC and broadcaster ITV PLC - bought 4,200 shares at 2,383.90 each. Following the transaction, Crozier holds 7,950 shares in ASOS.
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