Asos Plc plunged after the online fashion retailer’s third profit warning since December, saying sales are being held back by distribution problems.
The company, known for items like leopard-print bodysuits, said that shifting to new technology at U.S. and European warehouses is taking longer than expected, affecting stock availability. The shares fell 22% early Thursday in London.
The latest warning shows that Asos is still struggling to come to grips with operational issues. The company’s shares have lost 63% of their value over the past 12 months, though the company tried to reassure investors with a more upbeat report for its first half in April.
Asos has been struggling to keep up with other online fashion chains targeting young shoppers, especially Boohoo Group Plc, which has linked its marketing to reality TV series “Love Island.”
Pretax profit is now expected to be in a range of 30 million pounds to 35 million pounds ($37 million to $44 million). Analysts had a consensus estimate of 55.9 million pounds.
Berenberg analysts said it’s hard to understand why the problems were not known sooner, given that Asos has live data on sales and other metrics.
Asos “must now provide clear guidance on when operational issues will end and also provide clear evidence that these issues are the primary cause of weakness,” they said in a note.
Data centres, cold storage facilities most sought-after assets by investors
Biotech Money Shock: Investors Unwind Speculative Bets as Pandemic Fears Fade