Asos shares drops following downgrade of profit forecast
Shares in online fashion retailer Asos have dropped 14 per cent in early trading.
Online fashion retailer Asos has seen a drop in its share price after its revised its profit forecast.
Shares dropped by 14 per cent in early trading despite overall sales in the three months to the end of August increasing by 15 per cent. Asos is still recovering from a fire which devastated its warehouse in Barnsley. The company was forced to suspend trading following the incident and it stated that it had lost £25 million to £30 million in lost sales.
However, Asos stated that insurance payments meant that annual profits would meet its forecasts, which had been revised following the fire. The Barnsley warehouse was the company's global distribution centre and the incidents had affected 20 per cent of the stock held at the site. It had significantly impacted on the company's operations but it is confident after a recovery in the future.
Strong UK performance has been highlighted as a potential saving grace with profits before tax are due to be in line with market expectations for the year. Its previous profit warning had been blamed on the weak pound which had been affecting its sales overseas but it was much more confident about its prospects for the future.
Nick Robertson, Asos chief executive, said: "In the new financial year, we'll make significant investments in our international pricing and proposition, as well as in our logistical infrastructure and technology platform. As a result, we expect profit before tax for the year to August 31st, 2015 to be at a similar level to 2013-14."
In June the company had issued a profit warning which sent shares tumbling by 30 per cent. It was the second warning of this kind in the space of three months and at the time Mr Robinson described the situation as something they had "not hoped for".
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