Online fashion retailer ASOS has warned profits could fall by as much as 40% as it counts the cost of supply chain strains and Brexit duties – and said it was parting company with its boss.
Shares plunged as much as 15% in early trading as the group pencilled in slowing sales growth ahead, after benefiting from a surge in demand during lockdowns.
It is the latest fashion retailer to warn of supply chain strains and higher shipping costs taking their toll on trading, following Next and Boohoo.
Meanwhile, it is targeting more rapid global expansion abroad over the coming years, with the aim of lifting annual revenues to £7bn.
ASOS also revealed that Nick Beighton is stepping down as chief executive after six years in charge.
Announcing Mr Beighton’s departure, chairman Adam Crozier said that while significant progress had been made in recent years, there was “more to do to accelerate the pace and intensity of commercial execution”.
The announcement came as ASOS reported a 25% rise in pre-tax profits to £177.1m for the year to the end of August as sales climbed 20% to £3.9bn.
But profit margins were squeezed by factors including “elevated freight and Brexit-related duty costs” as well as the mix of products sold.
Meanwhile a poor summer season dragged on growth in the UK.
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That was after travel restrictions negated demand for holiday outfits for its twenty-something customers, many of whom were only eligible for second dose of the coronavirus vaccine in August and September.
ASOS predicted a slower pace of growth, of 10-15%, for the 2021-2022 financial year and also sees profits falling.
It blamed tough comparisons…
Source : skynews
