Shares in fashion retailer Asos are up this morning (June 6th) as the company's stocks recovered from crashing hard yesterday on the back of the firm issuing a profit warning.
Asos stocks were down by 30 per cent yesterday after the profit warning was issued, which was the second time in the last three months that the company has taken such a measure.
Chief executive Nick Robertson admitted that the performance of the company has not been up to scratch in the last few months. He said its latest results were "not what we had hoped for".
The data for the three months to the end of May showed retail sales rose by 25 per cent year on year, with sales in the UK up by 43 per cent and international sales increased by 17 per cent.
Mr Robertson described these sales as "strong", but noted how sterling's position against other international currencies has hurt the profit margins of the company. The pound has risen by as much as ten per cent against some other currencies in the last 12 months.
The chief executive added: "Our accelerated investment in technology and infrastructure to support our £2.5 billion sales ambition is progressing and capex remains within guided levels. All customer metrics – active customers, new customers, order frequency and units per basket – are positive and we are totally focused on rolling out the Asos business model globally as the world's leading online fashion destination for 20-somethings."
However, Asos announced that its forecast on profit margins has been cut to 4.5 per cent from 6.5 per cent. This was on the back of a sales target of £1 billion for the current financial year.
Asos has become one of the world's most recognisable fashion retailers in the last few years, but investors responded negatively to the profit warning and stocks in the firm crashed yesterday. But by 08:31 BST this morning, they had bounced back around six per cent and these gains held up in the following hours.
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