ASOS issue profits warning gloom
The internet fashion shop's shares fell by 31% yesterday after it said that its full year profit would fall short of forecasts, due to pesky infrastructure investments, added promotional activity and the strong British pound.
Chief Executive Nick Robertson said:
"There has been an unusual combination of factors that affected our profitability this year. Some of these are within our control, such as the investment in our IT and infrastructure as well as startup costs in our China business…and we wouldn't change any of that."
"But some are out of our control, principally the significant strengthening of sterling, which has hit our sales hard in our growing international business".
In an unscheduled trading statement, Asos reduced its earnings before interest and tax-margin guidance to 4.5% from 6.5% for the current financial year
The strong pound meant that customers in some territories have faced price increases of more than 25%, which is no fun when you're sourcing a blouse with a wolf motif on it to get that East London look.
Robertson again: "Whilst our profit performance for this financial year is not what we had hoped for due to an unusual combination of factors, our accelerated investment in technology and infrastructure to support our £2.5 billion sales ambition is progressing and capex remains within guided levels,"
"All customer metrics—active customers, new customers, order frequency and units per basket—are positive," he added, with unhelpful knob-speak.