Pegged back

2 April 2014 By Dominic Elliott

Even after a blip last month, the UK fashion and tech darling still fetches more than 75 times forward earnings. Ploughing money into new warehouses is vital, but could create supply disruptions. Global expansion is causing headaches. And other retailers won’t stand still.

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ASOS, Britain’s biggest online-only fashion retailer, reported a 21 percent fall in half-year net profit, in line with analysts’ forecasts, after a rise in costs linked to its foreign expansion.

In a statement on April 2, ASOS said net profit was 15 million pounds in the six months to Feb. 28, down from 19 million in the same period a year ago. ASOS plans to invest 68 million pounds in the current financial year, more than doubling its sales capacity to 2.5 billion pounds. ASOS said it expected full-year sales of 1 billion pounds.

In March, ASOS said it would need to raise investment for this year by 13 million pounds ($22 million) to further global growth. Shares dropped 8 percent in response on March 18, as the company also said sales growth was 26 percent in January and February, lower than the 32 percent expected by analysts.

Shares in ASOS were down 0.5 percent by 1000 BST on April 2.

This item has been corrected in paragraph 2 to refer to a long-term goal of more than doubling revenue to 2.5 billion pounds, not a doubling of market capitalisation.

Context News

ASOS, Britain’s biggest online-only fashion retailer, reported a 21 percent fall in half-year net profit, in line with analysts’ forecasts, after a rise in costs linked to its foreign expansion.

Shares in ASOS were down 0.5 percent by 1000 BST on April 2.

This item has been corrected in paragraph 2 to refer to a long-term goal of more than doubling revenue to 2.5 billion pounds, not a doubling of market capitalisation.

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