Fashion retailer ASOS sinks after warning on 2024 sales
Reuters
Published Nov 01, 2023 07:09
Updated Nov 01, 2023 10:10
By Sarah Young
LONDON (Reuters) -Online fashion retailer ASOS (LON:ASOS) warned sales would fall again in 2024, hitting its shares, though the British company said its ongoing turnaround meant growth would return the following year.
ASOS said on Wednesday sales would fall between 5% and 15% in its fiscal year to September 2024, behind forecasts and sending its shares down 10%, continuing a difficult run for the stock which has shed 50% over the last six months.
Shore Capital called the sales downgrade "worrying".
ASOS Chief Executive José Antonio Ramos Calamonte is a year into his plan to revive the company, once a poster child for the online fashion revolution which slumped post-pandemic due to fierce competition and a problem with excess inventory.
Casting 2024 as a transition year, ASOS said that historic excess stock would continue to drag on sales and profitability, but for 2025 it expected a return to growth with a core earnings margin around pre-COVID levels.
Most clothes retailers have suffered from Britain's wet summer and then an unseasonably warm September which hit sales of autumnal clothing, but some have fared better than others.
Next on Wednesday reported better-than-expected third-quarter sales, while, like ASOS, online fashion retailer Boohoo (LON:BOOH) cut its outlook in October.
Calamonte said he was encouraged by sales of fashion lines sold under ASOS's new commercial model and the company would be well set by 2025, once it was free from the hangover of its previous set-up and old stock.
The CEO said he was "very happy" with ASOS's financial position amid media speculation it could sell the Topshop brand it has owned since 2021 to boost its balance sheet.
"We don't comment on rumours and speculation," he told reporters.
For its last financial year, the 53 weeks to Sept. 3, ASOS reported an adjusted loss before interest and tax of 29 million pounds versus a 44 million pounds profit the year before.
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Written By: Reuters
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