Asos first half profits fall

ASOS distribution centre near Barnsley, South Yorkshire.
ASOS distribution centre near Barnsley, South Yorkshire.
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British online fashion retailer ASOS posted a 10 per cent fall in first half profit, reflecting investment and lower prices, though the firm said it was confident full-year profit and margin would be in line with expectations.

The company, which issued three profit warnings last year, said on Wednesday it made a pretax profit of £18m in the six months to February 28.

That compared to analysts’ average forecast of £16.3m and £20.1m made in the same period in its previous financial year.

ASOS’s investment in international prices resulted in a gross margin decrease of 230 basis points during the period. That and increased investment in distribution capacity reduced the profit outcome.

Chief executive Nick Robertson said: “With our continued investment in our international price competitiveness gaining traction, momentum in the business is building. This gives us confidence in the outlook for the second half.”

ASOS’s first-half retail sales, reported last month, rose 17 per cent on a constant currency basis to £536.4m, with UK sales up 27 per cent and international sales up 10 per cent.

Analysts are on average forecasting a 2014-15 pretax profit of £45m down from £47m in 2013-14.

Shares in ASOS, down 30 per cent over the last year, closed Tuesday at 3,629 pence, valuing the business at £3.03bn.