Online fashion retailer ASOS and homewares chain Dunelm report from the retail sector this week, while delivery firm Domino’s Pizza also serves up its latest trading update.

ASOS, which reports half-year results on Wednesday, tarnished its otherwise stellar record earlier this month with a worse-than-expected quarterly sales performance.

More than a fifth of its stock market value was wiped off after the retailer’s second quarter growth failed to match forecasts and it warned that margins were likely to be impacted this year by investment costs.

The group, whose rapid expansion of recent years had made it one of the London market’s best performing stocks, said retail sales were 26% higher year-on-year at £136.7million in the two months to February 28, but this was below City expectations for 32% growth.

Analysts downgraded full-year profit forecasts to £64.5m after the update, while ASOS said moves to bring forward investment costs would hit first half profits.

With around 70% of the year’s profits now expected in the second half of the year, ASOS is predicted to post interim earnings of about £19.4m, down from £25.6m reported a year earlier.

But ASOS insisted it remains on track to achieve annual sales of more than £1bn for the first time a year ahead of schedule and said trading had been strong in all territories except its Rest of World region, where it faces adverse currency movements, notably in Australia and Russia.

The reaction in the market caught analysts by surprise, with many still optimistic over the group’s long-term prospects.

Andrew Wade, retail expert at Numis Securities, said: “Despite this bump in the road, which demonstrates just how difficult it is to build an online operation of such scale, our view on the business is little changed. We remain confident that ASOS is a unique proposition, a profitable fast fashion pureplay destination, squarely targeting its 20 something market, with a vast global growth opportunity.”

ASOS shares have soared in recent years, rising from 255p at the start of 2008 to around 7000p earlier this year, giving it a value of more than £6bn.

Its websites attract 71mn visits per month while it had 8.2m active customers in the last year, of which 3.2m were in the UK.

Domino’s Pizza has set the bar high for trading this year having declared itself one of the “strongest growth stories on the UK high street” after notching up more sales records in 2013.

Its first quarter trading update on Wednesday is likely to show further robust growth after it revealed last month that UK like-for-like sales were up by an impressive 14.6% in the first seven weeks of the current financial year.

This marks a significant pick up from the 7% rise over 2013, although it comes as Domino’s benefits from weak comparatives.

The group took an all-time high of £14.1m during one week in December, with established stores averaging weekly sales of £20,903. UK profits to rose 11% to £50.4m, although group results were held back by losses in Germany.

A write-down on the value of its German assets cost £19.6mn last year, meaning group profits halved to £21.6m. Excluding loss-making operations in Germany and Switzerland, however, underlying group profits rose 11.6% to £55.2m.

James Cooke, analyst at Panmure Gordon, said Domino’s first quarter trading so far has been “very strong” and predicts another increase in UK profits this year.

But he added that this would be largely offset by more woes in Germany, with analysts expecting overall profits to remain largely flat at £55.8m in 2014.

Domino’s has suffered in Germany, where it made a £7m loss last year, although chairman Stephen Hemsley said on reporting results last month he remained optimistic over its prospects.

Domino’s has 858 mainly franchised stores in the UK, Ireland, Germany and Switzerland. It plans to open another 45 stores in the UK and Ireland this year as part of aims to expand the estate to 1,200.

The group is currently searching for a successor to departing boss Lance Batchelor, who is leaving at the end of April to head over 50s specialist Saga.

Homewares chain Dunelm updates on trading on Thursday as it puts faith in a television advertising blitz to continue boosting sales.

The out-of-town and online retailer, which has 140 stores across the UK, launched its first ever TV ad campaign last year in a move that helped it to overcome dismal trading amid the heatwave.

It saw like-for-like sales rise 2.9% in its second quarter in a marked rebound after dropping 5.3% the previous three months, helping pre-tax profits rise 2.9% to £61.6m in the six months to December 28.

The group hailed the early success of its adverts for helping drive the turnaround and is following it up with a bigger nationwide campaign this spring.

With the housing market recovery also providing a boost to homewares retailers, analysts believe Dunelm stands to continue delivering sales growth in its second half.

Barclays experts predict like-for-like sales to rise by 4% for the final six months, although it said Dunelm faces tough comparatives from a year earlier in its third quarter.

The group’s improvements to its internet offering are set to help cement a decent performance, with Dunelm recently launching its first online distribution centre.

This was credited with helping internet sales leap 50% higher year-on-year in the first half by expanding its next day delivery capability and allowing it to deliver orders closer to Christmas.

Dunelm also improved its popular reserve and collect service, cutting the time between ordering and collection to three hours. It is spending £7 million on ramping up its online offering further, with a new website being developed and improvements to customer service and order handling systems.

The firm also opened six new superstores over its first half, including one relocation, and is planning another five new launches and relocations in the second half.

Analysts at N+1 Singer believe there is scope for Dunelm to nearly double its store portfolio to more than 200. Barclays experts added in a recent note that Dunelm offers “one of the most compelling expansion stories in UK retail”.

Dunelm was founded by Bill and Jean Adderley, who set up the business in 1979 as a market stall business selling ready-made curtains.

The couple still own a 55% stake in the group together with other family members. Mr and Mrs Adderley are no longer involved in the day-to-day running or management of the business, but their son and former chief executive Will Adderley remains on the board as executive deputy chairman.