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Ryan that report was awful mate. All for being positive on ASOS but that report was as bad as it could possibly be.
Going under lmao. That one made me laugh mate I'll be honest.
As a trade yes it probably wasn't the best decision. However as a longer term hold there is nothing wrong with the company. Give it until the earnings update at least imo.
Good question. Definitely think there is a physiological element with the historic share price. On historical metrics P/E etc.. it is cheap if you assume past macroeconomic conditions i.e normalised supply chains etc...
Value is very subjective, however this is a macro play for me. I'm quite short in the US at this stage and in ASOS you have a solid company priced for destruction. If we see inflation coming down / fiscal support from the gov. the company will fare better from an economics perspective. The risk to reward is favourable in my opinion.
Perhaps the announcement of the new PM? Earnings in October? Or an improvement in Macroeconomic conditions. This drop hasn't changed my mind on the company, still happy to hold for the long term. Buying here.
In my opinion the market is pricing ASOS in relation to inflationary pressures. Margins and demand are adversely impacted by increased inflationary pressures.
Not at all. I've been short for the past few months. I'm saying that retail is making it far easier for shorters because they are forgoing basic logic and panicking at every opportunity.
This drop is caused by PMI data. Laughable how some ppl on here are blaming shorters as if there is a conspiracy against you.
Added more to my position today + closed my short from £11.
march dated forwards. good risk to reward.
Looking to increase my position at these levels. Will wait to see where the market settles and may increase allocation.
Good and bad news. Strong non store sales volumes up 4.8% MoM, driven by promotions by online retailers. Bad news, signs of entrenched inflation in the data, leading to more sticky inflation and a more aggressive rate hiking cycle by the BoE. I suspect that there will be a rebound in both Boohoo and ASOS on the back of this. Please don't buy into this and use the rise to reduce exposure of your positions.
Good and bad news. Strong non store sales volumes up 4.8% MoM, driven by promotions by online retailers. Bad news, signs of entrenched inflation in the data, leading to more sticky inflation and a more aggressive rate hiking cycle by the BoE. I suspect that there will be a rebound in both Boohoo and ASOS on the back of this. Please don't buy into this and use the rise to reduce exposure of your positions.
Commonsense5. Good points. Would add that retail has been going through the worst margin compression for the past few decades. Extrapolating current PBT is wrong imo, as margins will expand with supply chains easing / consumer behaviour reverting back to pre pandemic levels in terms of returns, when inflation returns to the 3-4% level by end of 2023.
This is a high risk long term investment and positioning should be treated in that manner.
CFO leaves in October. Non story imo. More important news to digest is the inflation report.
Sub £8 buyer.
Have you listened to the latest earnings call? The COO has stated that the company will have capital restraint. This mitigates your point of a raise, as you are assuming that CapEx will remain elevated. As for Topshop, topline growth is very promising and adds to their view of ASOS having different brands for different price points.
For disclosure: I have a long position ~£8. Short position ~£11. Reduced my long position by 20% when the equity reached £11 based on possible Macroeconomic risks and went long XLE on its dip to hedge against worsening energy costs.
Thought I would give my thoughts on the current Macroeconomic climate and how this relates to ASOS.
1. Hawkish rhetoric from BoE, brutally honest assessment of the economy. 50bps in play with possible rate hikes in the future.
2. PMI and Retail Sales outperform against EU.
3. Large geopolitical risks from NI Protocol and Energy , which could further impact inflation / growth.
June Retail Sales report highlights:
1. Non-store retailing (predominantly online retailers) sales volumes fell by 3.7% in June 2022; sales volumes were 20.8% above their February 2020 levels.
2. Automotive fuel sales volumes fell by 4.3% in June 2022, down from 0.8% in May 2022. Sales volumes were 7.6% below their pre-coronavirus February 2020 levels. Retailers commented that high petrol and diesel prices were reducing fuel sales volumes. Record-high petrol and diesel prices are reported in our Consumer price inflation June 2022 release as average petrol prices rose by 18.1 pence per litre in June 2022, the largest monthly rise on record (since 1990). Diesel prices moved similarly with a rise of 12.7 pence per litre.
3. Clothing stores sales volumes fell by 4.7% in June 2022, down from an increase of 2.2% in May 2022. Household goods stores (such as furniture stores) sales volumes fell by 3.7% in June 2022 because of falls in each of their sub-industries. FEEDBACK FROM RETAILERS SUGGESTS THAT CONSUMERS ARE CUTTING BACK ON SPENDING BECAUSE OF INCREASED PRICES AND AFFORDABILITY CONCERNS.
4. Online spending values fell in June 2022 by 2.7% when compared with May 2022. This is because of falls across all sub-sectors except department stores. The proportion of online sales fell to 25.3% in June 2022, from 26.4% in May 2022. This is a continuation of a broad falling trend since its peak in February 2021 (37.4%). Despite the fall in June, the proportion of online sales remains substantially above its level of 19.7% in February 2020 before the coronavirus (COVID-19) pandemic.
My opinion --> Textile, clothing and footwear stores make up 25.7% of online sales as a proportion of retail in the sector. Month on month sales are down 2.4%. Clear demonstration that inflationary pressures are eating into discretionary spending and that pent up demand peaked in May. Should this trend continue it is fair to assume that demand will fall. However, ASOS is NOT a topline growth story at this stage and to think of the equity in this manner is wrong. This is a margin compression issue. High costs - shipping / energy / labor etc.. have compressed margins and resulted in rhetoric on this board of a debt raise. However, it is important to recognise that while higher interest rates will impair demand, they will also cool inflationary pressures and restore margins. I'm not going to go into detail about my thesis for investing in ASOS, but to summarise: if you believe that ASOS has a strong enough brand to withstand changes in consumer demand stay, if not sell.
Don't agree with any of that. Would like to hear the data behind your view. The fall in market cap is due to macro headwinds which will alleviate with time.