Assos shares fall 14% in fear of Covid

Asos shares are down 14% as online clothing giants warn of Covid, supply chain issues and recent “calm” sales.

  • Asos saw a 60% increase in UK sales in the four months to the end of June.
  • But sales in the last few weeks have become more “calm” in bad weather.
  • Boss says the group is cautious in terms of volatility, Covid and supply chain issues
  • The share of online retailers listed on Aim has fallen by more than 14% today

Online fashion giant Assos UK sales grew 60% in the four months to the end of June, but warned that volatility would increase as the pandemic progresses.

As many physical stores were just beginning to reopen during this period, Asos took advantage of the shutdown to add 1.2 million customers to the site. Customers inspired by the recent easing of blockades due to the increased line of dresses and “occasion wear” sold on the Asos website.

However, bad weather and “volatility”, in part due to continued uncertainty about Covid 19, mean that sales have become more “calm” in the last few weeks. Says Asos.

As the company has warned for next year, the stock price of Asos, which is listed on the Aim, has plummeted and is now down 14.32% (674.00p) to 4,033.00p. A year ago, the group’s share price was 3,489.00p.

Note: Assos shares fell more than 14% this morning after the group provided the latest information.

Retailers also emphasized that rising fares and disruptions in the global supply chain are squeezing profits.

Boss Nick Byton said: “ASOS has made another strong performance against the backdrop of ongoing social restrictions and global supply chain pressure.”

The Group expects full-year profits to be nearly in line with expectations.

Asos said sales were strong across the European Union, especially in Germany.

Growth is also increasing in the EU, especially in Germany.

Sales Growth: Asos has seen a 60% increase in UK sales in recent months.

Sales Growth: Asos has seen a 60% increase in UK sales in recent months.

Earlier this week, Asos announced that it had signed a deal with US division brand Nordstrom to sell its Topshop line in US stores. The company wants to further expand its global reach in the future.

The company said in its latest stock market information: ‘Trading in the last three weeks of the period has become more modest, as continued Covid uncertainty and bad weather have affected market demand, especially in the UK.

“Given the rapidly evolving situation of Covid around the world, we expect volatility measurements to continue in the short term.”

Despite the reopening of physical stores early in the period, he added that the UK was doing well with increased promotional efforts to capture available demand for attractive product offerings.

“The last week of June softened due to continued Covid uncertainty and the impact of unseasonable weather on consumer demand.”

Sales for the four months to June 30 were up 31% to £ 1.29bn, which was a 60% increase in UK sales to £ 526.4m.

The US was up 31% to £ 144.8m, supported by currency fluctuations in favor of Asos.

Sophie Lund-Yates, Senior Equity Analyst at Hargreaves Lansdown, said:

“This is to be expected. If in doubt about when the so-called free day will occur, the young core customer will postpone the purchase of party dresses. Heavy rains also mean less sociability. The restrictions are set to be relaxed in the next few days, so demand may increase as people prepare to hit bars and clubs again.

There is a lot of rest in regaining some of the lost ground, as the market is clearly disappointed by the uncertainties pointed out in the Asos bank statement. The next quarter is very important because it gives a more accurate picture of the sales pace that Asos can achieve in normal times.

Richard Hunter, Market Head of Interactive Investor, said:

“But last year, along with the rise seen in the wider FTSE AIM 100, the market share was 40% ahead, market consensus remained unabated in the long-term outlook, and there are still strong buys. “


Assos shares fall 14% in fear of Covid

Source link Assos shares fall 14% in fear of Covid

Back to top button