Asos Declines as First-Quarter Sales Growth Misses Estimates

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Asos Plc fell the most in almost three months as first-quarter sales growth at the U.K.’s largest online-only fashion retailer lagged behind analysts’ predictions because of declining demand abroad.

Asos dropped as much as 9.4 percent, the steepest intraday fall since Sept. 16, and was trading down 5.4 percent at 2,250 pence as of 9:11 a.m. in London. That extended the stock’s plunge this year 63 percent, valuing the retailer at 1.88 billion pounds ($2.94 billion).

The company, which sells Vivienne Westwood clothing and Vans shoes targeted at twenty-somethings, has struggled with operational setbacks this year. Currency movements made its clothes more expensive abroad, and the London-based retailer also suffered a fire at its Barnsley distribution center in June.

“September and October were challenging,” Chief Executive Officer Nick Robertson said today in a statement. “Our sales have since gathered momentum and we had our biggest ever trading week over cyber weekend in November.”

Retail sales rose 8 percent in the three months through November, with U.K. retail revenue up 24 percent and international sales falling 2 percent, Asos said. The median of 14 analyst estimates compiled by Bloomberg was for 9 percent growth. Growth slowed from the previous quarter, when retail sales advanced 15 percent.

“We believe the risk profile remains elevated and prefer to sit on the sidelines until visibility improves,” Simon Bowler, an analyst at Exane BNP Paribas, said in a report to clients.

Asos said it has introduced zonal pricing in the U.K., Australia and France to improve performance. The retailer has received 6.3 million pounds in insurance proceeds related to the fire and is investing this back in international product pricing.

“After taking this into account, we expect full year profits to be in line with expectations,” Robertson said.