16th September 2014
Shares in the online fashion retailer ASOS have fallen by 8.6 per cent today as the company posted a profit warning.
It closed at 2,214p this afternoon after earlier warning investors that its profits would remain static at £45 million next year, disappointing analysts who had hoped it would return more than £60 million.
A fire at the company’s main warehouse in Barnsley meant it lost between £25 million and £30 million in sales, but thanks to insurance payments it said it would still meet its forecasts.
In the three months to the end of August, total sales rose by 15 per cent. UK sales increased by 33 per cent, while international sales rose 6 per cent.
However, bad news for investors spelled better news for customers as ASOS revealed it would be looking to cut its prices further.
Freddie George, a retail analyst at Cantor Fitzgerald, told This is Money he would retain his forecast for lower profits of £46million in the year to August but reduced his target for the year to August 2015 from £55million to £48million.
He says: “There will inevitably be questions over the robustness of the company’s model, particularly its development strategy overseas.
“More worryingly perhaps, the company’s recent ‘damage limitation’ strategy has also, we believe, impacted the company’s entrepreneurial ethos and held back its evolution.”