Asos says warehouse problems behind it after profit slump
Shares surge 23% after fashion firm reports progress in addressing operational issues
Online fashion retailer Asos said problems with warehouses in the United States and Germany were behind a 68 per cent slump in annual profit. Photograph: Suzanne Plunkett/Reuters
Online fashion retailer Asos said problems with warehouses in the United States and Germany, which caused a 68 per cent slump in annual profit, were largely behind it, sending its shares sharply higher on Wednesday.
Shares in the firm, which sells fashion aimed at twentysomethings, surged by 23 per cent in mid-afternoon, after it reported “substantial progress” in addressing its operational issues.
Asos is working through a major overhaul of its warehouse and technology capabilities, moving from a UK-focused to a global model so it can better access growth opportunities.
It cut profit forecasts in July, saying problems ramping-up warehouses in Atlanta and Berlin had restricted product availability, hitting sales and raising costs.
Asos made a pretax profit of £33.1 million (€39.4 million) in the year to August 31st – in line with guidance in July but down sharply from £102 million (€118 million) in 2017/18. Although revenue rose 13 per cent to £2.73 billion (€3.17 billion), its retail gross margin fell 250 basis points. – Reuters