Asos share price sinks as retailer trims guidance
Shares in Asos (LON:ASC) have tumbled in London this morning as the retailer trimmed its sales growth guidance, pointing to ‘significant deterioration’ in November. The update has also pressure shares in blue-chip retailers, with both Burberry (LON:BRBY) and Marks & Spencer (LON:MKS) underperforming the market.
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As of 10:03 GMT, Asos’ share price had lost 40.73 percent to 2,481.00p. The retailer’s shares have lost more than 60 percent of their value over the past year. The group’s rival Boohoo (LON:BOO) meanwhile is 10.82 percent down at 163.20p, even as it issued a statement today that its trading performance remained strong.
Asos announced in a statement today that it had “experienced a significant deterioration in the important trading month of November,” and with conditions remaining challenging, the company was reducing its financial expectations. The retailer now expects to deliver sales growth of about 15 percent for the year to August 2019, compared to a previous forecast of between 20 percent and 25 percent. The group has also flagged EBIT margin of about two percent, compared with a previous forecast of about four percent.
Analysts weigh in
“The last thing the sector needs right now is a profit warning from one of its few star performers a week before Christmas,” Natalie Berg, retail analyst at NBK Retail, commented, as quoted by City A.M. “E-commerce is often positioned as the death knell of the high street, so you know things are bad when even the online giants are struggling.”
Bloomberg meanwhile quoted Berenberg’s Michelle Wilson as commenting that a ‘strategy error over Black Friday’ was a major contributor to the retailer’s lowered outlook. The newswire also quoted Adam Cochrane at City as calling Asos “another casualty of the weather and associated promotional environment.”