- Sales fell 15% year-on-year
- Pivot to faster stock model 'on track'
- Inventory down circa 30% year-on-year
Shares in ASOS (ASC) fell nearly 5% to 381p in morning trading as the online fast-fashion retailer said wet weather in July and August ‘produced a weaker sales result’.
ASOS’s shares have not been performing well year-to-date falling 28% as the company struggles with cash flow issues and unfavourable trading conditions.
Sales for the period ending 3 September 2023 fell by 15% year-on-year, however the company said this was ‘in-line with guidance.’
GUIDANCE LOWERED
ASOS expects earnings before interest and taxation (EBIT) to be ‘around the bottom of the guided £40 million to £60 million range’ with free cash inflow in the second half now expected to be circa £60 million excluding refinancing costs (previously £150 million).
Analysts at Berenberg however remain upbeat about the fast-fashion online retailer ignoring the 30% decline year-on-year related to inventory in the second half of the year.
‘The successful implementation of the Driving Change agenda has set ASOS on the course to profitability in the full year of 2024 and has enhanced the strength of the underlying business, which in our view, is underappreciated by current valuation.
‘ASOS trades on 0.3x 12-month forward full year 2024 FY24 EV/sales, being one standard deviation below its five-year trailing average.’
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