Jul 18, 2019
Asos profit warnings seem to come as fast as its fashions
As Shore Capital complained: "Initially sales guidance was for [about] 25 per cent growth in FY2019 - that has now been halved in the space of six months." Nor is the "Newness" of Asos's excuses proving a good look: it has now added third-party operational failings to the pricing and marketing challenges it admitted to late last year. Shore Capital called Asos's warehouse problems "Self-inflicted". This year's lower profit will come after £47m of transition costs - moving US fulfilment from Barnsley to Atlanta is not cheap. In a fully stocked UK, quarterly sales were up 16 per cent and analysts still expect group profit to double in FY2020 and rise by another 50 per cent in FY2021. Can Asos shares, which fell 20 per cent on this latest warning and are now down 55 per cent in 12 months, recover? And would I really buy a paradise print festival shirt in neon snake print? Possibly.
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