Fashion victim: Asos shares hit as sales growth stalls again
Asos fell the most since December after second-quarter sales growth fell short of its already reduced full-year target.
It's the biggest fall since the online fashion retailer issued a profit warning following a "significant deterioration" in November sales, cutting its full-year guidance to 15pc growth from a range of 20pc to 25pc. Retail sales rose 11pc in the three months ending February 28, leaving it playing catch-up.
The restrained update from an online retailer that competes with Amazon and has furnished fashions to the likes of British royal Meghan Markle, shows the UK's retail crisis is not just hitting bricks-and-mortar stores.
Shares fell as much as 13pc to 2,790 pence in London trading, though they recovered to more modest losses later in the session. "Asos's first-half trading statement isn't as reassuring as might have been hoped following its shock downgrade in December," wrote Paul Hickman, an analyst at Edison Investment Research. "This leaves a task for the second half to get back to the guidance, which is not an ideal message for a business which has already lowered targets."
Asos said it's looking to improve its US business after unexpectedly high demand caused "a significant short-term dispatch backlog" at its Atlanta warehouse.
It's looking to cut prices and raise marketing spending, particularly in its largest markets, France and Germany. Own-brand sales - 35pc of its total goods - only slightly improved, said CEO Nick Beighton. Asos maintained its full-year outlook.