Asos warns full-year target is at risk from inflation, war

[LONDON] Asos, the British online fashion retailer, said its full-year earnings goal is at risk from accelerating inflation and disruption from Russia's war in Ukraine.

The retailer said Tuesday (Apr 12) it's maintaining its forecast for the fiscal year ending in August, except for the loss of business due to a suspension of sales in Russia. The company said the economy has worsened since it gave the guidance in October, and there's more risk than normal in the second half.

Asos has suffered a change in fortunes over the past year as its winning position in online retail during Covid lockdowns was weakened by stores reopening, shopping habits normalising and supply-chain delays. The shares have lost a third of their value this year and the retailer is still seeking a chief executive officer to replace Nick Beighton, who stepped down in October.

Asos's forecast is for pretax earnings of £110 million (S$195.4 million) to £140 million. Analysts have been expecting £103 million.

Russia and Ukraine provided about 4 per cent of revenue and £20 million of profit last year, Asos has said. The company said it expects second-half sales to accelerate after rising 4 per cent in the first half at constant currencies.

The company has an operating loss in the first half of £4.4 million compared with earnings of £109.7 million in the year-earlier period.

The company was founded in north London in 2000 by Nick Robertson and his brother with a small amount of seed capital. It listed on London's junior market AIM (Alternative Investment Market) for 20 pence a share and a valuation of £12 million and for many years it was considered a stock-market favourite, reporting quickly growing sales and profit. BLOOMBERG