ASOS sees sales growth slowing due to COVID-19 uncertainty Reuters

LONDON (Reuters)-Online fashion retailer ASOS (LON:) reported that sales increased by 21% in the four months to June 30, but said it was due to COVID-19 uncertainty and severe weather , Especially in the UK, has affected market demand.

ASOS’s stock price fell 8.4% at 0713 GMT. The company said that given the rapidly evolving COVID situation around the world, trading volatility is expected to continue in the short term.

Therefore, it expects that the basic growth rate of its balance in 2020-21 will be basically the same as the same period last year. It still forecasts the adjusted profit before tax for the full year to be in line with its expectations.

ASOS has experienced multiple coronavirus lockdowns, and store-based competitors had to close stores.

In the four months ended June 30, total revenue was 1.29 billion pounds ($1.79 billion), up from 1.1 billion pounds in the same period last year, as its active customer base increased by 1.2 million to 26.1 million.

However, gross profit margin dropped by 150 basis points due to unfavorable foreign exchange trends, rising freight costs due to disruptions in the global supply chain, and the category product portfolio still focusing on casual wear.

It pointed out that with the relaxation of COVID restrictions, the product mix and higher return rates in recent weeks have begun to reflect people’s reverting to occasional wear.

It stated that the global supply chain pressure is caused by the shortage of global freight capacity and delivery delays in key supply areas.

“Although we have considered the continuing impact of the epidemic on our customers in the short term, we believe that the structure of the global e-commerce fashion market has undergone permanent changes, which will drive the long-term growth of online fashion sales,” CEO Nick Baiton (Nick Beighton) said.

Before Thursday’s update, analysts’ average forecast for adjusted pre-tax profits for the full year 2020-21 was 198 million pounds, up from 142.1 million pounds in 2019-20.

(1 USD = 0.7220 GBP)