Shares in Asos have fallen after the online fashion retailer stated that the profits to be made this year are set to be much lower than expected.
The British retailed claimed that sales growth in the United States and in Europe had been slowed down due to several problems in its warehouses, meaning that several products that were available to online shoppers had to be offered for a limited stock only.
Due to this, the company is expecting profits of €34 million to €40 million, rather than the €61 million that was forecasted by analysts.
Asos’ CEO, Nick Beighton, claimed that the refurbishment in several warehouses around the United States and Europe had taken much more than previously expected, hindering the “stock availability, sales and cost base in these regions.”
Mr Beighton also added that the company was certain on what was causing the problems and will be working as hard to resolve them as soon as possible.
The downside is that Asos claim that whilst the problems in the warehouse might be resolved immediately, it might take “some time” to regain the faith of the customers that were affected by the delays.
Sales rose by 12% in total during the four months up until the end of June, with the United Kingdom in particular having a “robust” rate, with sales growing by 16%.
However, the main warehouses that were affected were those in Berlin and Atlanta, causing problems in the United States and Europe, leading to a growth of just 12% in the United States and 5% in Europe, very low compared to previous figures.
In recent years, Asos has experienced massive growth with the increasing dependence on online shopping, yet last December the company surprised investors with a shocking profit warning, leading to the company’s share value going down by more than a half in less than a year.
Despite ongoing concerns surrounding the share value of the company, several analysts have acknowledged that the ongoing works in the warehouses will benefit the company when it comes to facilitating “long-term growth in these key markets,” remarking that the future “remains bright for Asos.”