The online fashion retailer said it expected profits for the 12 months to August 2015 to be "at a similar level" to the year recently ended. Asos added that a fire at its main warehouse in Barnsley in June resulted in lost sales of 25 million to 30 million pounds.
Consequently, Asos warned in June that profit for 2013-14 would miss its then forecasts by 30 percent as the strength of sterling caused a slowdown in international sales growth. The fire disrupted trade and further damaged sentiment.
But insurance payments meant annual profits would meet forecasts, it said. Trying to reassure investors and the market alike, Asos chief executive Nick Robertson said that "We remain focused on the long term opportunity for Asos, with 2.5 billion pounds of sales as our next staging post."
Despite the fire, total sales grew by 15 percent to 240 million pounds over the summer, compared to the same period last year. In the UK, which accounts for 41 percent of the Asos business, sales rose 33 percent.
Third profit warning in barely six months
But this was not the first profit warning in the year to date, as the former darling of the retail sector had first startled investors in March when it announced plans to increase spending on infrastructure to meet future demand, at the expense of short-term profits.
Nick Robertson, the chief executive, described UK performance as “strong”. After adjusting for the insurance pay-out for the fire, the company expects profit for this year to be in line with reduced expectations of 45 million pounds, down from earlier estimates of 69 million pounds following two profit warnings.
Now the group is warning that profits for its 2015 financial year are likely to be flat, as it steps up investment in logistics and its website. Analysts polled by Bloomberg had been expecting a recovery to 63 million pounds.
This latest profits alert was taken badly by market watchers. "Asos has warned that profits in [year end] August 2015 will not recover... Ouch," the veteran retail analyst Nick Bubb wrote in a note, predicting that investors would have plenty to discuss with management.
However, Bubb also noted the UK sales growth was "very respectable at first sight" and not that far behind the "stellar" 50 percent sales growth seen at rival fashion retailer Boohoo.
Profit warnings costing Asos its ‘market's darling’ crown
It is worth a note that, up until this year Asos had been the great success story of British retailing: having floated at just 20 pence in 2001 its shares hit a high of 7,195 pence in February, recalled the ‘Independent’.
But its shares have fallen 62 percent over the last six months after nearly doubling its price a year ago and closing at 2,422 pence on Monday, giving a market capitalisation of 2 billion pounds.
Angela González Rodríguez