News Column

Shares in ASOS sink after profit warning

June 6, 2014

British online fashion retailer ASOS has warned full-year profits would miss forecasts by 30 per cent as the strong pound forced it to cut prices in foreign markets, wiping pound(s)1.2 billion ($2 billion) off its market value.

The former darling of the retail sector first spooked investors in March when it announced plans to spend on infrastructure to meet future demand, at the expense of short-term profits, and the stock took a further hammering on Thursday when the group spelled out the full impact.

Shares in ASOS, whose fast-changing fashions are a global hit with internet-savvy 20-somethings, were down 31 per cent in early trading as it lowered its operating margin guidance for its current fiscal year, which ends in August, and for the next.

Its shares have now more than halved from the all-time high of 7,195p reached in February to trade around 3,107p, giving it a market value of about pound(s)2.6billion.

N+1 Singer analysts cut their full-year pre-tax profit forecast to pound(s)44.8million and added they expected a big downgrade to 2014-15 estimates too.

Retail sales in Britain in the three months to the end of May were up 43 per cent.

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Source: Herald, The (Scotland)

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