This is still a hugely popular company; so many women prefer to buy online, especially since Suzannah Reid says that she gets most of her clothes from Asos. With Christmas party dress season coming up, this must be a "buy" over the next few weeks
Sell Asos as profits fall: Online retailer Asos saw its shares jump 15% as investors believed the worst was over and the rebuilding can begin. However, Questor won’t be jumping on this bandwagon just yet and is waiting for more evidence of a recovery in profit growth. Asos reported full year pretax profits of £46.9 million to the end of August, short of initial expectations of £65 million. The damage was done in Australia, the retailer’s most profitable market. A combination of an economic slowdown, too much stock and a strengthening pound meant prices had to be slashed to clear items, and profits suffered as a result. While sales are slowing sharply on one side of the world, in Britain they are accelerating. The U.K. reported sales growth of 35% during the year, and an acceleration on the 32% growth rate reported during the first half. However, sales in the U.K. are made at a lower profit margin. The U.K. remains Asos’s largest single division, contributing about 38% of group revenue and 36% of group gross profits. Taken together, this suggests a less profitable business. Nick Robertson, Co-Founder and Chief Executive, was cautious on the outlook for next year, adding that even though he believes the stock build-up is largely cleared, prices will be lowered overseas to drive sales. Questor said sell on January 14, with the stock at £66.50, and thinks the shares at £22.33 still do not represent good value; trading on 45 times the revised profit figure of £48 million for August 2015, giving earnings per share of about 43.3p. With profits falling, competition increasing and capital investment high, it remains a sell. Asos at £22.60+316p Questor Says “Sell”.
RE: Poor results
Although I personally agree with the arguments, I also note that hedge funds have closed some of their shorts in last few days. Tiny movement I agree, but give me hope... http://shorttracker.co.uk/company/GB0030927254/all
Get your shorts on
Get your shorts on people!!! I presume ASOS are selling plenty of shorts . How far down do people think this will go? Overvalued and poor results with flat outlook.
Message from Denmark
Live in Denmark. Saw a very smart young girl pick up an ASOS parcel from the post office today. She was smiling all over her face. Gives me hope.
How much longer can Asos defy gravity?: Nick Robertson – former adman, great-grandson of tailor Austin Reed and the guiding spirit behind Asos – says that 2014 has been the worst he has seen since he started the business 15 years ago, what with sterling going the wrong way, a warehouse fire and a glitch in its pricing systems. But looking ahead, he reckons earnings growth will be flat next year and perhaps 5% the year after. On the usual metrics, that means the stock is still overrated. That may have been true when the group started out flogging clothes – “As Seen on Screen” – via the net. Now, though, Asos sells trainers and own-brand pyjamas, and sales are close to £1 billion a year. As competitors are crowding into its space, it is having to play catch-up on installing the structures and systems needed to keep up with its expansion, particularly overseas. Asos will spend £110 million over the next two years beefing up systems and warehousing on top of the £65 million already spent this year. Now at about £22 – the level they were in 2012 – the shares are nearer ground level, but still prone to taking off like Marilyn dresses during gusts of hot air. Buyers should wait till they are anchored to reality.
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