Yahoo Finance Asos disappoints investors despite soaring sales
Online fashion retailer Asos has warned that its runaway sales growth will be somewhat lower than its investors' sky-high expectations, dealing a blow to its shares.
Retail sales climbed by 22pc to more than £800m in the four months to June 30 thanks to double-digit growth in all its key markets, but that was below analysts’ forecasts of more than 25pc.
The Aim-listed company also warned that its full-year sales growth was likely to come in at the lower end of a previously guided range of 25-30pc, spooking investors, who sent its shares down 11pc to £57.82 in afternoon trade.
Russ Mould of investment company AJ Bell said: “The negative market reaction should not come as a surprise as Asos is still considered to be a growth stock – something which is reflected in its high equity valuation.”
Nick Beighton, who took over from Asos founder Nick Robertson as chief executive three years ago year, said the company had been "managing demand" while focusing on bolstering its infrastructure, including new warehouses in Atlanta and Berlin due to open within the next few months.
The company still expects its full-year profit before tax to be in line with expectations of around £101m after it managed to grow margins ahead of target by focusing on full-price sales instead of relying on discounts.
Asked why full-year sales would fall towards the bottom end of expectations, Mr Beighton said: “Sometimes you over-achieve, sometimes you under-achieve, but they’re in the range I gave 12 months ago.”
The results were “largely all on track [but] just a different growth profile than the market was expecting”, he added.
Asos has grown rapidly as the proportion of clothes bought online has begun to soar, generating revenues of £1.8bn last year.
Having floated in 2001 it is now by far the most valuable company on London’s junior Aim market, with a £4.8bn market cap that could make it eligible to join the blue-chip FTSE 100 Index should it decide to seek a premium listing.
