AO World Plunges 20% After Pandemic-Driven Sales Boost Fades
Investing.com
Published Oct 01, 2021 08:32
By Geoffrey Smith
Investing.com -- Ao World (LON:AO) stock fell as much as 20% in early trading on Friday after the electronics retailer warned that the huge boost in sales it has had from the pandemic is fading.
After the opening plunge, they recovered a little to be down only 17% by 3:30 AM ET (0730 GMT).
AO World said sales in the six months through September rose only 6% on the year, and added that it expects the next six months to turn out much the same.
The company had been one of the London market's biggest winners from the pandemic in 2020, as demand for household appliances skyrocketed due to the mass adoption of the working-from-home model. It's now given up more than half of its gains from 2020 trough to peak, but is still up more than 100% from the before the start of the pandemic.
As with many companies trying to see through the distortions of pandemic effects, AO World stressed the comparison with the first half of its last full pre-pandemic year, Compared with the six months through September 2019, revenue was up 66%.
Despite what it called a 'challenging' operational environment due to supply chain and other issues, AO World indicated it didn't expect product shortages in the key holiday period ahead.
"Whilst the macro-outlook remains uncertain, we have confidence in the proven resilience of our business model and are well placed to meet customer demand in our peak third quarter sales period," the company said.
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