High StreetOnline & Digital

Asos issues profit warning amid ‘operational issues’

Online retailer Asos has issued its third profit warning this year, on the release of its trading statement for the four months up to 30 June.

The retailer cited “operational issues” as one of the contributing factors to the profit warnings, and the expected steep decline in profits.

The retailer attributed, lower sales, higher warehouses transition costs and costs associated with organisational restructuring as the reasons behind the warning, with annual profits expected to be in the range of £30m-£35m.

Company sales for the period rose 11% to £894m, and group revenue also rose by 12% to £919m.

Nick Beighton, CEO, Asos said: “Whilst we are making good progress in improving customer engagement, our recent performance in the EU and the US was held back by operational issues associated with our transformational warehouse programmes.

“Embedding the change from the major overhaul of infrastructure and technology in our US and European warehouses has taken longer than we had anticipated, impacting our stock availability, sales and cost base in these regions.”

He added: “Where we have been unencumbered by these issues we have seen robust growth and overall our customer momentum is improving with the business hitting 20m active customers globally for the first time.”

The warnings come during a challenging time for the retailer, with reports earlier this month saying that around 100 of its head office staff could be made redundant.

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