Asos shares slip after fashion marketplace reminded analysts of lower profit guidance
Asos saw its share price tumble on Monday, alongside several retailers including Joules and THG.
The share slide followed reports that the online fashion marketplace had privately reminded City analysts on subdued guidance for the year ahead, as is a standard pre-close practice.
Asos shares were subdued by almost six per cent on Monday afternoon, while e-commerce firm THG also saw its shares down almost seven per cent.
Fashion retailer and lifestyle group Joules also saw shares sink, with shares down two per cent on Monday evening.
The Sunday Times newspaper reported that one analyst anonymously shared unease at how the retailer was managing expectations.
Pre-tax profit for the year just ended is anticipated to land towards the bottom of a £20m to £60m range supplied in June.
Earlier guidance of profit between £110m to £140m was slashed earlier this year, with the retailer pointing to high levels of customers returning online orders.
Sales over the coming year were set to sink below forecasts for 9.8 per cent growth, the company suggested to analysts, it was reported.
“Asos has in place clear policies and processes to ensure equality of information to the financial markets and adheres to these at all times,” an Asos spokesperson added.
CityA.M. understands that such calls are routine and no information was shared on the calls that was not already in the public domain.
Peel Hunt slashed its target price for the retailer, estimating the retailers’ early autumn/winter lines were not luring in customers.
Analysts cut the target price for the firm from 1,500p to 750p and retained a Hold stocking on the stock.
Earlier this year, Asos said returns will place further pressure on warehousing and delivery costs while it said its revised forecast “considers both increased markdown and labour inefficiency to clear the returned stock.”
While gross sales had sped up with shoppers keen to buy occasion wear after the pandemic, net sales had been hit by a “significant increase” in returns rates in the UK and Europe towards the end of the three months to 31 May 2022.