LONDON (Reuters) — British online fashion retailer Asos reported a further slowdown in quarterly sales growth due to a drop in international sales, hitting its shares.
Asos said September and October had been tough as it installed a mechanized order picking system at its depot in Barnsley, northern England, in time for the peak Christmas trading period. Asos was hit by a fire at the warehouse earlier this year.
Sales have since picked up, Asos said, with the company seeing its biggest ever trading week over the last weekend in November, when many online players offered discounts.
Asos, which has issued three profit warnings this year, said its total retail sales rose 8 percent to 246 million pounds, or $385 million, in the three months to Nov. 30, its fiscal first quarter, down from a 15 percent rise the previous quarter.
U.K. retail sales increased by 24 percent, while international sales fell by 2 percent, dented by a strong pound. Asos chief executive Nick Robertson said international trading conditions remain “challenging”.
The stock, which has tumbled from a high of 71.95 pounds hit in February due to slowing sales growth and the depot fire, was down 8.6 percent at 9:25 a.m. CET at 21.76 pounds.
“Recovery from numerous recent setbacks could take some time in our opinion and there is clearly uncertainty over the long term margin capability of the business,” said N+1 Singer analysts, who rate the stock a “sell”.
Asos said it received 6.3 million pounds of insurance related to the depot fire, which it was using to bring down international prices.
The retailer said it expects to meet forecasts for flat profits in 2014-15. Asos has forecast sales growth of 15-20 percent in its 2014-15 year.