ASOS profit to be at lower end of expectations
Fashion e-tail giant ASOS issued the briefest of trading updates on Friday and said that profit for the full year will come in within expectations, but at the bottom end of the range it previously predicted.
The company has been buffeted by headwinds in recent periods and said that “after having seen good growth in June and July, sales in August were weaker than anticipated”. That’s a story that has also been heard from its rivals, while BDO’s August UK retail sales round-up on Friday said that the appetite for fashion waned somewhat last month as the combined impact of the heatwave and the cost-of-living crisis hit home.
For ASOS, it means full-year sales, adjusted pre-tax profit and net debt will all lag hoped-for levels even though they’ll be within the previously forecast range. It expects constant currency sales growth of around 2% (and at least sales won’t fall), with net debt of around £150 million.
The company said it was affected by the “impact of accelerating inflationary pressures on consumers and a slow start to Autumn/Winter shopping”.
It’s to be hoped that AW22 seasonal shopping starts to pick up this month following the arrival of more autumnal and very wet weather, as well as this week’s announcement about the cap on energy prices. This means bills will be lower from October than had been originally planned.
ASOS wasn’t making any firm predictions on this front but said that it “remains cautious about the outlook for consumer spending, [yet] it continues to make strategic progress and manage the business for the current environment.
Its full-year results will be released on 12 October.
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