Online retailer ASOS Christmas sales falter
- Credit: PA
Online retailer Asos has warned over sales and profits after experiencing a “significant deterioration” in trading in the run-up to Christmas.
The group said in an unscheduled trading update for the first three months of the financial year that, while it delivered sales growth of 14%, it “experienced a significant deterioration in the important trading month of November and conditions remain challenging”.
As a result, Asos has reduced its expectations for the current financial year. It now expects sales growth of 15% for the year to August 2019, down from 20% to 25%, and its anticipated earnings margin has been revised down from 4% to 2%.
Asos shares collapsed in morning trade, dropping 36% to 2,667p at the market open.
The warning will cause alarm among retailers as, up until now, it has been high street firms bearing the brunt of a brutal Christmas trading period.
Asos pointed to a high level of discounting and promotional activity across the market, leading it to increase its own special offers, which typically eat into profit margins.
Unseasonably warm weather during the last three months has also seen reduced spending by shoppers, Asos added.
- 1 Forbidden Suffolk: 6 places you can't visit in the county
- 2 Suffolk town named one of the best places to go on holiday in the UK
- 3 Suffolk campsite named among the best in the UK by the Guardian
- 4 Man stabbed in back and sides in Ipswich attack
- 5 Ranking every League One away kit from worst to first
- 6 'Like a Halloween scene' - huge caterpillar webs engulf hedges
- 7 Striker Jackson signs new Town deal
- 8 Teenager arrested after six people injured on university campus
- 9 Striking new seafront café opens its doors to customers after two-year wait
- 10 'It riles me to the core' - Anger as sofas dumped near Suffolk beauty spot
However, in the UK, Asos said it continues to “materially outperform”, although this has been achieved at the cost of more promotional activity than initially planned and consumers buying into lower priced product.
Trading conditions across Germany and France, which account for 60% of the retailer’s EU sales, have become significantly more challenging,