Asos stock down on third profit warning in 8 months

New York –On Thursday, Asos Plc (ASOS.L) said in an unscheduled announcement that it expected full-year profits to be up to 45 percent lower than what the City expected.

This is the third time I the year to date that the online fashion retailer has issued a profits warning. Over the past eight months, Asos has constantly blamed continued problems at its warehouses in America and Europe for its poor trade.

Back in Christmas last year, the retailer argued trading was hit by a high level of discounting and promotional activity in the previous month. As a result, Asos cut full-year expectations in April. Profit before tax may fall as much as 71 percent in the coming months, they warned.

Asos’ last profits warning wipes off 513 million pounds in market value

This time, the third since December, the British online fashion retailer warned on profits saying problems ramping up warehouses in the United States and Germany had restricted product availability, hitting sales and raising costs.

Shares in the once favourite fashion stock lost 23.2 percent to close at 21.07 pounds apiece in London today and wiping 513 million pounds off the company’s market value. The stock has devalued by over 62 percent in the year to date.

Asos’CEO acknowledges the company’s overhaul’s delay is “a failure in execution”

“The major overhaul of our infrastructure has been bumpier and taken a lot longer than we originally anticipated,” Chief Executive Nick Beighton said on a conference call with analysts. Beighton referred to the group’s turnaround strategy, which includes a major overhaul of its warehouse and technology capabilities, moving from a UK-focused to a global-centric model so it can better access growth opportunities.

“We acknowledge that this is a failure in execution,” further recognized Asos’ CEO.

“Logistics and distribution costs have been steadily increasing as retailers compete on offering faster deliveries at cheaper prices,” said in declarations published by Reuters Nicla Di Palma, retail analyst at Brewin Dolphin.

Crédito de foto: Web de Palmier