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(Alliance News) - ASOS PLC shares tumbled on Thursday as the fast fashion firm warned of slower growth, predicting Covid-19 uncertainty may result in volatility.
The stock was down 14% to 4,041.00 pence each on AIM in London on Thursday morning.
In the four-month period to June 30, which ASOS labels as P3, growth in the final weeks of the trading stretch was muted. The London-based retailer put this down to the virus and poor weather in the UK.
During the four-month period, revenue rose 27% annually to GBP1.29 billion from GBP1.01 billion. The figure includes delivery costs and third-party revenue. Stripping out such items, retail sales alone were 26% higher at GBP1.24 billion.
Sales rose despite the four-month period coinciding with high street stores in the UK reopening.
There was 60% retail sales growth in ASOS's UK arm, an 18% climb in the EU and a 16% rise in the US. In the Rest of the World division, retail sales fell 9.2%.
In the US, ASOS said it saw increased demand for occasion wear, as Covid-19 curbs eased and spending power boosted by stimulus cheques. Germany helped drive growth in the EU, though trading in southern Europe "was more challenging" amid lower levels of tourism.
"Revenue growth in the period was strong, against a backdrop of continued restrictions on consumers, volatile demand and increased global supply chain pressures," ASOS said.
"Trading in the last three weeks of the period was more muted, as continued Covid uncertainty and inclement weather, particularly in the UK, impacted market demand. We anticipate a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide."
ASOS ends its financial year on August 31. For the P4 period, which runs until the end of August, it expects underlying growth to be largely in line with the prior year.
For the whole of the financial year, adjusted pretax profit growth is still expected to be in line with expectations. The figure excludes the contribution of newly acquired Topshop brands, as well as integration costs.
ASOS said it anticipates a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide. It anticipates "global supply chain environment pressures" to persist.
Chief Executive Nick Beighton added: "Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global e-commerce fashion market has changed forever, which will drive an increase in online fashion sales over the long term. We're excited about the size of the prize ahead of us and the opportunity of delivering on our ambition of being the number one destination for fashion-loving 20-somethings."
Looking ahead, ASOS flagged a "global opportunity" to grow in its target markets.
"We are continuing to confidently invest across our unique ASOS brands, our ASOS platform and our ASOS experience, powered by our ASOSers, technology and global warehousing capabilities." the company said.
By Eric Cunha; ericcunha@alliancenews.com
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