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ASOS 4 Month Sales Rise; Warns On FY Profit; Stock Dips

Shares of ASOS plc (ASOMY.PK,ASOMF.PK,ASC.L) were losing around 18 percent in the early morning trading in London after the company trimmed its fiscal 2019 profit view, despite reporting higher sales in its four months.

In its trading statement for the four months ended June 30, the British online fashion and cosmetic retailer reported that total sales grew 12 percent to 919.8 million pounds from last year's 823.9 million pounds. Sales increased 11 percent on a constant currency basis.

The company said its total retail sales grew 11 percent from last year to 894 million pounds.

Retail sales grew 16 percent in UK, 5 percent in EU, 12 percent in US, 14 percent in ROW and 9 percent in international regions. The company noted that sales in EU & US were held back by warehouse transformation.

Total orders placed were 24.8 million, up 14 percent from last year. The company recorded positive momentum in customer engagement with 16 percent growth in visits.

Looking ahead, the company said it now expects the temporary lack of stock availability in Europe and more limited width in USA would continue to impact growth levels for the remainder of the financial year. This, along with extra costs to get to operate warehouses has led to weak expectations for the financial year.

The company now expects sales growth for the year to be broadly in line with year to date performance.

Overall profit for the year is now expected to be in the range of 30 million pounds to 35 million pounds after about 47 million pounds transition costs and about 3.5 million pounds restructuring costs.

The company previously expected profit of around 35 million pounds.

The weak outlook reflects the impact of the lower sales, higher warehouses transition costs and costs associated with organisational restructuring.

In London, ASOS shares were trading at 2,240.90 pence, down 18.30 percent.

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