Jul 18, 2019

Asos shares slump on profits warning

Shares in Asos have sunk after the online fashion giant said that this year's profits are likely to be much lower than expectations. "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," said Asos chief executive Nick Beighton. Total sales across the group rose by 12% in the four months to 30 June, Asos said, and in the UK - where trading "Remained robust" - sales grew by 16%. However, the "Operational challenges" at its warehouses in Berlin and Atlanta had caused problems in the US and Europe, where sales were up 12% and 5% respectively. Shares in Asos opened down 20% following the statement, before recovering some ground to stand 12% lower. This is the third time in eight months that Asos has issued a profit warning and the company's share price has now more than halved over the past year.

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