ASOS issues profit warning as sales slow
Online fashion retailer ASOS has warned on profit after its quarterly sales were hit by customers returning more items during the cost of living crisis.
In a trading update, the retailer said it had now revised its adjusted pre-tax profit range to between £20 million and £60 million.
In the three months to 31 May, revenue came in at £983.4 million compared to £987.9 million in the same period in the prior year.
While total sales in the UK and US rose by 4% and 15% respectively at constant currency, sales in the EU and rest of the world fell by a respective 2% and 8% (excluding Russia).
The company said gross sales accelerated, but net sales were impacted by a significant increase in returns rates in the UK and Europe towards the end of the period.
Mat Dunn, ASOS chief operating officer, said: “At our half year results, we set out the actions we had taken as we faced into a more challenging backdrop, notably the work undertaken in the face of the global supply chain challenges which led to an improved stock profile and increased newness and availability. We saw the benefit of this come through in the shape of strong gross sales and a further acceleration of growth in the US. At the same time, we noted that the impact of inflationary pressures was yet to be felt by our customers.”
ASOS said its occasion wear category performed well with demand driven by the return of holidays, weddings and events post-pandemic.
Looking ahead, Dunn said: “It is too early to tell for how long the current pattern of customer behaviour will continue but we are taking swift and decisive steps to minimise the impacts whilst continuing to deliver against the strategic initiatives we laid out in November that will ensure that ASOS builds for the long-term.”
ASOS has also announced the appointment of José Calamonte as chief executive and Jørgen Lindemann as chair.
