Shares in Asos tumbled on Thursday as the online fashion retailer issued its third profits warning in seven months, blaming problems with the rollout of its new automated warehouses.
The group said sales were hit by the overhaul of warehouses in Berlin and Atlanta, which left the firm struggling to keep up with demand. It now expects to make profits of £30m to £35m this year, far below City forecasts of £55m.
Shares in Asos – once a darling of the stock market – have already lost half their value this year after profit warnings in December and March.
The latest warning sent the shares plunging by more than 20% initially but they later recovered to £23.87, still down by 13%.
The shock warning in December, blamed on poor consumer spending, sent shivers through the retail world, suggesting the high street malaise was spreading to online retailers.
Asos said total sales rose 12% in the four months to 30 June. However, growth in the US and EU was lower than expected, at 12% and 5% respectively. Sales in the UK rose 16%.
Nick Beighton, the Asos chief executive, said: “Embedding the change from the major overhaul of infrastructure and technology in our US and European warehouses has taken longer than we had anticipated, impacting our stock availability, sales and cost base in these regions.”
He hopes to resolve the problems by the end of September.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said: “Asos can be a bit of a Cinderella stock, struggling against the odds and still making it to the ball in the end. Growing pains have been a consistent problem at Asos over some years and this quarter is no exception. Not having stock available is a massive faux pas for a retailer and the cost of resolving the problems will eat into profits.
“If, as expected, Asos can resolve its stock issues by the autumn, then this could be just another operational blip in the Asos timeline. We don’t think Asos should be written off just yet.”