Apr 12, 2022
Asos reports sharp slowdown in profits and growth
Online fashion retailer Asos has reported a sharp fall in sales growth and profits and warned of worsening trading conditions but left its full-year forecasts largely unchanged. The company said sales grew just 4 per cent to £2bn in the first six months of its financial year to February 28, in line with previous guidance but a long way off the 25 per cent increase reported for the same period last year, when Asos was boosted by the closure of many store-based rivals. Adjusted pre-tax profit was £14.8mn, down 87 per cent from the same period a year ago. Last October, it predicted sales growth of 10 to 15 per cent for the current year, with adjusted pre-tax profit of between £110mn and £140mn. The company's core market is people in their twenties, who are likely to be among the hardest hit by recent increases in taxes and sharply rising energy bills in the UK. Shares in the group have fallen 70 per cent over the past year as the cost of freight and raw materials have risen and rates of return of items have reverted to pre-pandemic levels.
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