Asos has issued a profit warning
Major UK retailer Asos has issued a profit warning after it saw a “significant deterioration” in sales growth, Ecommerce News reported. After the online fashion retailer has shared this unscheduled trading update, shares dived by almost 40% when the market opened.
Asos says that one of the reasons for the alarming figures is the high level of discounting and promotion activity among competitors. This has led to increasing its own special offers, which had come at a cost to profit margins. And the warm weather during the last three months has also led to shoppers spending less at Asos, the company explained.
Asos also explains that trading conditions in Germany and France, which account for 60% of Asos’ European sales, have become “significantly more challenging, with the performance of these two countries at +15% year to date.”
SEE ALSO: UK pubs and restaurants expect millions in Christmas spending