Friday preview: ASOS under pressure to maintain frenetic growth

13th Oct 2011 15:55

Online clothing firm ASOS updates the market. As fashion chain Supergroup has recently demonstrated, when the market begins to lose faith in a growth company's ability to maintain its frenetic growth rate, the damage to the share price can be swift and painful. As recently as the start of August, the shares were trading comfortably above 2200p, but they are now down to about 1510p.Singer Capital Markets said Friday's update, which covers the group's second quarter, should show a slow-down in sales growth, partly reflecting tougher trading conditions but also partly due to "self-induced" problems. "However, disruptive factors should be behind them now, and with strong growth expected in overseas markets, and self-help around margin, short term forecasts look achievable and long term sensitivities are unchanged," Singer says.The broker thinks that increasing demand from overseas will see the proportion of UK sales down to about 40% in the second quarter from around two-thirds in the first half of last year. "We suspect increased promotions, including in Brands where they have been matching competitor discounting over the Summer, may have diluted gross margins. That said, there is scope for key margin initiatives, including supply/buying, mix, and systems to have partly offset this, albeit a number of these are weighted towards H2 [second half] rather than H1," Singer said.INTERIM DIVIDEND PAYMENT DATE32Red, AZ Electronic Materials SA (WI), Braime (T.F.& J.H.) Holdings, Braime (T.F.& J.H.) Holdings (Non-Voting), Chesnara, Chime Communications, Computacenter, Drax Group, Edinburgh US Tracker Trust, G4S, Glanbia, H&T Group, IMI, IS Solutions, Lavendon Group, Logica, Melrose, Networkers International, Serco Group, Stadium Group, T Clarke, Tikit Group, UTV MediaQUARTERLY PAYMENT DATEYamana Gold Inc.INTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Goods Prices Index (JPN)Balance of Trade (EU) (10:00)Consumer Price Index (EU) (10:00)Harmonised Index of Consumer Prices (EU) (10:00)Import and Export Price Indices (US) (13:30)Retail Sales (US) (13:30)U. of Michigan Confidence (Prelim) (US) (15:00)Business Inventories (US) (15:15)GMSEurovestech, Plethora Solutions HoldingsANNUAL REPORTSurface TransformsIMSSComputacenter, RegusEGMSInvista European Real Estate TrustAGMSCeltic, Surface TransformsTRADING ANNOUNCEMENTSASOS, RecordFINAL DIVIDEND PAYMENT DATEFalkland Islands Holdings, Goodwin Plc, ILX Group, Jacques Vert, Mid Wynd International Inv Trust, Standard Life UK Smaller Companies Trust, Stewart & Wight