ASOS Plc share price down, posts fiscal 2015 profit warning

Asos Plc, Britains largest online-only fashion retailer, posted a warning for its 2015 profit due to lower selling prices and investments in logistics and technology. The companys shares declined as much as 15% after the third profit reduction for 2014.

Asoss Chief Executive Officer Mr. Nick Robertson said in a statement, which was cited by the Wall Street Journal: “In the new financial year well make significant investments in our international pricing and proposition, as well as in our logistical infrastructure and technology platform. As a result, we expect profit before tax for the year ended August 31st 2015 to be at a similar level to 2013/14.”

The company said that it expects an annual pretax profit for the fiscal year through August 2015 at a “similar” level to the previous year, narrowing initial expectations for £62 million to £45 million.

The companys sales in the U.K. rose by a third in the quarter ended August, but a minor gain of only 6% in international deliveries pushed overall retail sales growth down to 15%. International sales generate about 60% of the groups total revenues.

“International is not where we want it to be,” Chief Executive Officer Nick Robertson said on a conference call, which was cited by Bloomberg. “This is definitely a shift around from what we’ve been seeing historically. For the past two, three years we’ve seen international outperforming the U.K. and that’s swung around.”

Intensifying competition and a difficult international expansion slashed Asoss market capitalization by almost two thirds in 2014. The fiscal 2015 forecast is the fashion retailers third profit warning issued this year and comes after the company reported sales that amounted to £240 million ($390 million) for the fiscal quarter that ended on August 31st. This result is 21% higher than the one posted over the same period a year ago.

ASOS Plc lost 6.90% by 12:18 GMT to trade at GBX2 254 per share in London, marking a one year change of -57.96%. The company is valued at £2.02 billion. According to the Financial Times, the 19 analysts offering 12-month price targets for ASOS Plc have a median target of £40.00, with a high estimate of £62.00 and a low estimate of £14.40. The median estimate represents a 65.15% increase from the previous close of £24.22.