Asos says profits unlikely to grow in 2014-15

16th Sep 2014 07:54

British online fashion retailer ASOS has said that profits are unlikely to grow in 2014-15 because of significant investment in its international pricing.International pricing will not be the only of area of investment, however, as the group, which issued a profit warning in June, announced it was also looking to restructure its logistical infrastructure and technology platform.Retail sales rose 15% to £240m in the three months to 31 August, a 10% dip compared to the previous quarter, as the firm revealed that the impact of the fire at its Barnsley distribution centre amounted to between £25-30m worth of quarterly sales.ASOS sales in the UK grew 33%, while the company registered a 6% increase in international sales, though the figures represented a 10% and 11% decline respectively when compared to the previous quarter.Despite the slowdown in sales, revenue rose 16% to £975.5m with strong growth in the UK and in Europe, while growth in the US was flat due to the strong currency headwind but rose 10% on a constant currency basis.In June, ASOS warned that the strength of the pound had caused a slowdown in the growth on international sales which would cause the company to miss its forecasts by 30%, before the fire at Barnsley inflicted further damage."We remain focused on the long term opportunity for ASOS, with £2.5bn pounds of sales as our next staging post," said group chief executive Nick Robertson.Before the profit warning, analysts forecasted a consensus pre-tax profit for the 2013-14 year of £45m, down from £54.7m in 2012-13.Analysts at Kantar said that as far as profitability is concerned, the firm will continue to face headwinds on multiple fronts, while the chances of online retail giants such as Amazon or eBay purchasing the firm were slim.“There has been recent speculation on ASOS as an acquisition target with names such as Amazon and eBay being floated as possible purchasers. We believe it is unlikely that either Amazon or eBay will look to bring ASOS under their wings,” Kantar said in a note on Tuesday.“It is more likely that existing ASOS shareholder – Anders Holch Povlsen of Danish fashion company Bestseller – could look to make a play with ASOS and Zalando.”ASOS shares were down 12.12% to 2,128p at 08:43 on Tuesday.