ASOS shares slip further as it falls behind on targets

AIM-listed online clothes retailer ASOS (LON:ASC) has seen its share price drop by 6.41% to 3,005.05p (as of 15:15 GMT) as a reported 13% increase in revenues for the three months to 28th February failed to keep pace with full-year guidance. Gross margins improved by 40 basis points, but the board still expect full-year margins to be 150 basis points below the prior year.

CEO Nick Beighton commented: “Group sales over the period increased by 13% and retail gross margin improved by 40bps. We continued to outperform in the UK with sales growth of 14%. Sales in Europe were up 12%, although France and Germany, our two largest markets, continue to be challenging.

“Our US performance was behind our plans during the period. As our Atlanta warehouse went fully online, demand far exceeded our expectations. Whilst very encouraging for the longer term, this caused a significant short-term despatch back log which we have now cleared. These delayed shipments will be recognised in P3 and US trading is now regaining momentum. Our ROW segment returned to good growth of 20% after a disappointing Q1.

“Our retail gross margin guidance for the year remains. We will be increasing investment in price and marketing in the second half, particularly in France and Germany. Given the actions we are taking together with an improving US performance, we believe the Group will deliver stronger growth in the second half. Consequently we remain confident that we will meet guidance for the full year“.