ASOS Profit Warning: Earnings to Miss Forecasts as Consumer Demand Slumps
Online fashion retailer ASOS has announced that its full-year earnings will likely be at the lower end of its £130million to £150million forecast range. The company has attributed this to a 'soft consumer cellular backdrop', disappointing analysts who had expected higher sales.
ASOS has been working through a turnaround plan launched last year, and it has now entered the final stage. Despite the challenging conditions, the company has managed to 'permanently' slash costs and improve profitability. However, this news has not been well-received by investors. ASOS shares fell sharply following a profit warning, and they have been down almost 40% in the past year. This decline is even more pronounced since the peak of the Covid-19 pandemic, with shares dropping by more than 90% from their high point during that period. In 2022, ASOS shares were heavily shorted by various hedge funds and retail traders, contributing to significant stock price volatility.
ASOS has completed the third and final step of its turnaround plan, but the company's financial outlook remains uncertain due to the current consumer cellular backdrop. Despite cost-cutting measures, the company's shares have experienced significant declines in recent years, reflecting investors' concerns about the company's prospects.
