Continued deathwatch: ASOS

17 September 2014

bw asos ASOS are having a rough time. The troubled online clothing retailer had already posted a profit warning earlier this year, and have now posted another one.

This follows something of a disastrous 12 months for them, after a warehouse fires damaged stock and fourth-quarter sales were dented by a strong pound. The fire damage alone cost the company £30 million in lost sales.

Shares fell 8.88% to 2207p after the firm warned full-year profits were set to be lower than previously expected.

Whereas the analysts had reckoned on a £62 million profit in their forecasts, it's more likely to be nearer to £45 million.

The firm warned: "In the new financial year we’ll make significant investments in our international pricing and proposition, as well as in our logistical infrastructure and technology platform. As a result, we expected profit before tax for the year to August 31 to be at a similar level to 2013-14."

Retail sales for the three months to August 31 did increase 15%, but was still a slowdown deom the 25% from the previous quarter. The international business now accounts for 60% of sales but the strong pound means prices have risen by up to 20% in some markets.

Basically, international sales have fallen from 63% to 61% with Australia and Russia bringing sales down. We'll be keeping an eye on Asos.

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