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| Asos shares slump as it warns on profits | Asos shares slump as it warns on profits |
| (30 minutes later) | |
| Shares in Asos have sunk after the online fashion giant said that this year's profits are likely to be much lower than expectations. | Shares in Asos have sunk after the online fashion giant said that this year's profits are likely to be much lower than expectations. |
| The retailer said sales growth in the US and Europe had been held back by problems at its warehouses. | The retailer said sales growth in the US and Europe had been held back by problems at its warehouses. |
| These problems meant that the range of clothes available to shoppers in these markets had been limited. | These problems meant that the range of clothes available to shoppers in these markets had been limited. |
| As a result, it now expects to report profits of £30m-£35m this year, well below the £55m forecast by analysts. | As a result, it now expects to report profits of £30m-£35m this year, well below the £55m forecast by analysts. |
| Asos chief executive Nick Beighton said overhauling its US and European warehouses had taken longer than anticipated, affecting its "stock availability, sales and cost base in these regions". | |
| He added that the company was clear on what was causing the problems and was making progress on resolving them. | He added that the company was clear on what was causing the problems and was making progress on resolving them. |
| However, Asos said that while the warehouse problems were "short-term in nature", it added it might take "some time" to regain customers who had been affected. | However, Asos said that while the warehouse problems were "short-term in nature", it added it might take "some time" to regain customers who had been affected. |
| 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%. | 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. | 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. |
| 'Risk of losing out' | 'Risk of losing out' |
| Asos has enjoyed rapid growth in recent years as it has benefited from the shift towards shopping online. | Asos has enjoyed rapid growth in recent years as it has benefited from the shift towards shopping online. |
| However, last December it surprised investors with a shock profit warning, and the company's share price has now more than halved over the past year. | However, last December it surprised investors with a shock profit warning, and the company's share price has now more than halved over the past year. |
| Shares in Asos opened down 20% on Thursday following the latest warning, before recovering some ground to stand 12% lower. | Shares in Asos opened down 20% on Thursday following the latest warning, before recovering some ground to stand 12% lower. |
| Analysts at Liberum said the latest warning suggested that serious questions needed answering. | Analysts at Liberum said the latest warning suggested that serious questions needed answering. |
| "The operational issues in Europe and the US signal to us a lack of enough senior leaders in the business with the adequate skill-set in the business to undertake the complex capital projects ongoing," they said. | "The operational issues in Europe and the US signal to us a lack of enough senior leaders in the business with the adequate skill-set in the business to undertake the complex capital projects ongoing," they said. |
| Russ Mould, investment director at AJ Bell, said: "Fashion fans have plenty of places from which to buy clothes and so Asos is at risk of losing out to the competition if it cannot fix its problems fast. | Russ Mould, investment director at AJ Bell, said: "Fashion fans have plenty of places from which to buy clothes and so Asos is at risk of losing out to the competition if it cannot fix its problems fast. |
| "We live in an impatient world where so many people want something in an instant. If Asos doesn't have the stock ready to ship then consumers will simply go elsewhere." | "We live in an impatient world where so many people want something in an instant. If Asos doesn't have the stock ready to ship then consumers will simply go elsewhere." |
| However, Sofie Willmott, an analyst at research firm GlobalData, was more upbeat, arguing that the "changes being made to US and EU distribution centres are vital to facilitate long-term growth in these key markets". | |
| She added that the future "remains bright for Asos". | |
| "The retailer's agility and willingness to change to remain relevant to its customer base will help it to continue gaining market share, both at home and abroad.'' |