(Reuters) -British online fashion retailer ASOS said on Tuesday it expects annual profit towards the lower end of its forecast range due to lower sales. The company had previously guided for adjusted
ASOS Projects Revenue Shortfall, Shares Plunge 11% Amid Weak Demand
ASOS Revenue Forecast and Market Reaction
(Reuters) -British online fashion retailer ASOS warned on Tuesday that annual revenue would fall short of market expectations due to weak consumer demand, with profit expected to land at the lower end of its forecast range.
Impact of Consumer Demand
Shares in the London-listed firm dropped 11% in early trade, taking losses for the year so far to more than 40%.
Profit Expectations and Cost Measures
ASOS has been working to revive its fast-fashion appeal among its core base of shoppers in their 20s, while cutting costs amid intensifying competition from Chinese rivals and the impact of U.S. trade tariffs.
Analyst Insights on Brand Equity
Britain is ASOS's biggest market, but the U.S. accounts for about 10% of total sales.
The company had previously forecast an adjusted core profit of between 130 million pounds and 150 million pounds ($175 million to $201 million).
Nonetheless, ASOS said profit was still expected to rise more than 60% from a year earlier, driven by cost discipline and improved margins.
ASOS said revenue would come in slightly below market expectations. Analysts on average had expected the company's total sales to fall 8.4% on a constant currency basis for the fiscal 2025.
Gross merchandise value is also seen lower than expected as it prioritises "higher quality sales".
Analysts at J.P. Morgan said they continued to see questions on brand equity into the mid-term, and "struggle to become more constructive, despite some of the strategic steps forward".
ASOS, however, said it remained confident that its fiscal 2026 profit and free cash flow would be in line with market expectations.
The group pointed to "meaningful" cost-saving measures implemented between March and September that are expected to benefit the new financial year.
($1 = 0.7447 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Mrigank Dhaniwala, Subhranshu Sahu and Louise Heavens)
