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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  ASOS Plc    ASC   GB0030927254

ASOS PLC

(ASC)
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Delayed Quote. Delayed London Stock Exchange - 09/18 11:35:10 am
5066 GBX   +1.24%
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ASOS says warehouse problems behind it after profit slump

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10/16/2019 | 07:16am EDT
A model walks on an in-house catwalk at the ASOS headquarters in London

LONDON (Reuters) - British online fashion retailer ASOS said problems with warehouses in the United States and Germany, which were behind a 68% slump in annual profit, were largely behind it, sending its shares sharply higher on Wednesday.

Shares in the firm, which sells fashion aimed at twenty somethings, were up 18% at 0932 GMT, paring year-on-year losses to 40%, after it reported "substantial progress" in addressing its operational issues.

ASOS is working through a major overhaul of its warehouse and technology capabilities, moving from a UK-focused to a global model so it can better access growth opportunities.

It cut profit forecasts in July, saying problems ramping-up warehouses in Atlanta and Berlin had restricted product availability, hitting sales and raising costs.

"With hindsight we were too ambitious in tackling two international warehouses at the same time and our internal capabilities and bandwidth hadn't kept pace with the changing scale of our business," Chief Executive Nick Beighton told reporters.

But the problems were now largely fixed.

"From a warehouse perspective our (Berlin) Euro Hub automation issues are now resolved, the U.S. hub operation is stable and capable of scaling to a much greater level," said Beighton.

"The stock build there (Atlanta) is progressing in line with our internal expectations as we move towards the important peak trading (period)."

Analysts at Peel Hunt said they expected ASOS to aggressively trade the peak/Black Friday period after a poor season last year, driving customer re-activations with stronger discounts and an extended campaign.

"Coming up against last year’s failings, ASOS needs to beat the market’s lacklustre forecasts to rebuild investor confidence," they said.

CONFIDENCE

ASOS made a pretax profit of 33.1 million pounds ($42.2 million) in the year to Aug. 31 - in line with July's guidance of 30-35 million pounds but down sharply from 102 million pounds in 2017-2018. Although revenue rose 13% to 2.73 billion pounds, its retail gross margin fell 250 basis points.

While ASOS has struggled, online rival Boohoo has thrived. Its shares have increased 74% this year and the firm is now capitalised at 3.2 billion pounds versus ASOS' 2.1 billion pounds.

ASOS said priorities for its new financial year included strengthening its organisational capability with new hirings, removing non-strategic costs from the business and further increasing product choice, availability and newness.

"Whilst mindful of consumer uncertainty and retail trends in a number of our markets, we are confident in the substantial global opportunity for ASOS and look forward to the future with confidence," the company said, adding it had made a "solid" start to the 2019-20 year.

Prior to the update, analysts' were on average forecasting a pretax profit of 63 million pounds for 2019-20, according to Refinitiv data.

(Reporting by James Davey; Editing by Rashmi Aich and Mark Potter)

By James Davey

Stocks mentioned in the article
ChangeLast1st jan.
ACCESS CO., LTD. -0.96% 928 End-of-day quote.-2.83%
ASOS PLC 1.24% 5066 Delayed Quote.50.19%
BOOHOO GROUP PLC 0.66% 319.1 Delayed Quote.7.12%
HUB CO., LTD. 0.00%End-of-day quote.0.00%
HUB CO., LTD. 3.68% 705 End-of-day quote.-32.34%
THE GLOBAL LTD. 1.56% 195 End-of-day quote.-58.60%
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Financials
Sales 2020 3 222 M 4 161 M 4 161 M
Net income 2020 107 M 138 M 138 M
Net cash 2020 64,4 M 83,2 M 83,2 M
P/E ratio 2020 44,3x
Yield 2020 -
Capitalization 5 040 M 6 530 M 6 509 M
EV / Sales 2020 1,54x
EV / Sales 2021 1,33x
Nbr of Employees 4 000
Free-Float 73,3%
Chart ASOS PLC
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Technical analysis trends ASOS PLC
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TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 5 106,16 GBX
Last Close Price 5 066,00 GBX
Spread / Highest target 48,4%
Spread / Average Target 0,79%
Spread / Lowest Target -40,8%
EPS Revisions
Managers
NameTitle
Nicholas Timothy Beighton Chief Executive Officer & Executive Director
Adam Alexander Crozier Chairman
Mark Holland Chief Operating Officer
Mathew James Dunn Chief Financial Officer & Director
Clifford Cohen Chief Information Officer
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