- Online fashion retailer ASOS Plc slumped 16% in early trade following its full-year result announcement.
- The company stated that its sales growth could slow down in the first half of FY22 to a single digit, primarily due to supply chain disruption.
- The chief executive officers of the company, Nick Beighton, will step down by the end of 2021.
The UK-based online fashion retailer ASOS Plc (LON: ASC), which is a constituent of the FTSE AIM market, witnessed a sharp decline of over 16% in its stock prices on Monday, following the announcement of its full year result for the financial year ended 31 August 2021.
The company reported sales revenue of £3910 million, a rise of 20% compared to August 2020, while its gross profit rose by 15% at £1,776.4 million. The UK market reported a 29% rise in sales, while the US market reported 32% sales growth. Good revenue numbers were attributed to the rise in online shopping during the pandemic as most of the physical stores remain closed. The active client base of the company increased by 13%, at 26.4 million. Also, the company plans to do a capital expenditure of £210 million to automate its two fulfilment centres and increase technology investment to improve customer experience.
However, the company stated that its sales growth could slow down in the first half of FY22 to a single digit, primarily due to supply chain disruption across industry and demand variability. As a result, the company expects profit before tax (PBT) in the range of £110 million - £140 million, which is below the current year’s PBT of £177.1 million as of 31 August 2021.
Change of CEO and board members
The company has also announced few changes to its board. The chief executive officers of the company, Nick Beighton, will step down by the end of 2021. The company’s current CFO, Mat Dunn, will become the interim CEO and will oversee day-to-day operations at the company. Also, Ian Dyson will be the new chairman of the board, while Jorgen Lindemann will join the company’s board as Non-Executive Director. The company is also searching for new CEO.
Supply chain issue
Staff shortage in stores and supply chain disruption after the pandemic and Brexit has collectively impacted businesses across the UK and also restricted prospects of economic recovery in the country. Many companies have reported an impact on their productivity. Also, key economic indicators such as manufacturing PMI is growing at the weakest pace since the pandemic.
About ASOS Plc
ASOS Plc operates in the apparel retailing industry, offering fashionwear for the young generation. It provides different products through mobile and desktop websites and has operations in over 200 markets worldwide. The company deliver its products to customers through a robust logistics network having large delivery centres in the US and the UK markets.
ASOS Plc shares currently trade at GBX 2,395, down by 13.88% on 11 October 2021 at 12:30 pm GMT+1 with a market cap of £2,776 million. In the last one year, the stock has given a negative return of 55.88% to its shareholders.