Boohoo, Asos short interest elevated as headwinds rise

October 07, 2023 07:24 AM AEDT | By Invezz

Google News:

Boohoo, Asos short interest elevated as headwinds rise — Image source: Invezz

Recent News

Fed Daly eyes fall for possible policy shift

Fifth Third Announces Three-Year, $20M Investment in North Nashville

Inogen Alliance Associate Awards: Environment Analyst Sustainability D...

New Zealand Construction Report 2025: Output to Contract by 1% Due to...

Boohoo (LON:BOO) and Asos (LON:ASC), two of the top British fashion e-commerce companies are in trouble. Their stock prices have plunged, shedding billions in market capitalisation.

Boohoo share price has crashed by more than 93% from its highest point in 2021. It is now hovering near the lowest level on record. Similarly, Asos shares have crashed to 395p, ~95% from its highest level on record.

A substantial number of investors believe that these companies are not out of the woods yet. Asos is the most heavily shorted company in London with a short interest of 7.68%. Boohoo is the third most shorted firm with a short interest of 6.89%.

The most recent results showed that the two companies are in trouble as their sales and profitability dropped. Boohoo’s revenue dropped by 17% in the six months to August to £729 million. Its gross profit retreated to £389 million while the adjusted EBITDA fell to £35 million.

These results showed that Boohoo’s turnaround strategy is finding major headwinds as the number of customers in the platform slips. The management also believes that the revenue for the year will drop by between 12% and 17%.

Asos’ results also revealed that the company’s growth was slowing. Its total revenue dropped by 12% as the wet weather in July and August. This slowdown will likely continue even as the management implements a turnaround.

As part of this strategy, the company is reducing its inventories, refinance its balance sheet, and boosting its supply chains.

The challenge for Boohoo and Asos is that the cost of living crisis is continuing, the pound is falling, and competition from the likes of Shein is rising.

The post Boohoo, Asos short interest elevated as headwinds rise appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.