Asos dives as sales disappoint

The group, whose rapid expansion of recent years has made it one of the London market’s best performing stocks, also warned that margins were likely to be impacted this year by investment costs, including in China.

Its shares dived by 20 per cent at one stage, even though the group said it remains on track to achieve annual sales of more than £1bn for the first time.

Retail sales were 26 per cent higher year-on-year at £136.7m in the two months to February 28, but this was below City expectations for 32 per cent growth.

ASOS said sales were strong in all territories except the Rest of World, where it faces adverse currency movements, notably in Australia and Russia.

However, Cantor Fitzgerald analyst Freddie George noted that UK sales growth of 21 per cent to £48.4m was below his hopes for a rise of 30.6 per cent.

He downgraded his profit forecast for the year to August by £5m to £64m after the company also highlighted pressure on margins due to investment in new warehousing as well as start-up costs in China.

Mr George added: “The company, we believe will now focus on a limited number of markets with a view to making them as significant as the UK rather than taking a scatter gun approach to global expansion.”

ASOS’s websites attract 71 million visits per month while it had 8.2 million active customers in the last year, of which 3.2 million were in the UK.

Its shares have soared in recent years, rising from 255p at the start of 2008 to around 7000p earlier this year, giving it a value of more than £6bn.

Today’s warning also had an impact on smaller rival Boohoo.com, whose shares slid 10 per cent just days after joining the stock market in a move that delivered a big windfall for its founding family.