{"id":43934,"date":"2025-09-30T11:44:24","date_gmt":"2025-09-30T11:44:24","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/09\/30\/asos-stock-slumps-as-analysts-warn-profit-gains-may-not-offset-sales-weakness\/"},"modified":"2025-09-30T11:44:24","modified_gmt":"2025-09-30T11:44:24","slug":"asos-stock-slumps-as-analysts-warn-profit-gains-may-not-offset-sales-weakness","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/09\/30\/asos-stock-slumps-as-analysts-warn-profit-gains-may-not-offset-sales-weakness\/","title":{"rendered":"ASOS stock slumps as analysts warn profit gains may not offset sales weakness"},"content":{"rendered":"
<\/div>\n

British online fashion retailer ASOS warned on Tuesday that annual revenue would come in below market expectations, citing subdued consumer demand and a slow recovery in its fast-fashion business. <\/p>\n

The London-listed company said profit would still rise more than 60% from last year but land at the lower end of its previously guided range of \u00a3130 million to \u00a3150 million ($175 million to $201 million).<\/p>\n

The warning triggered a sharp sell-off in ASOS shares, which tumbled as much as 11% in early trading before trimming losses to 9% by late morning. <\/p>\n

The stock has now fallen more than 40% this year as investors remain cautious about the retailer\u2019s ability to revive growth in a crowded and price-sensitive market.<\/p>\n

Weak consumer demand and rising competition weigh on sales<\/h2>\n

ASOS acknowledged that its sales performance remained softer than anticipated, with revenue and gross merchandise value both expected to undershoot analyst forecasts. <\/p>\n

The company said its full-year revenue would likely decline slightly more than the 8.4% drop expected by analysts on a constant currency basis.<\/p>\n

Britain remains ASOS\u2019s largest market, but the company also relies on the United States, which accounts for around 10% of sales. <\/p>\n

US tariffs have increased pressure on the business, while Chinese rivals have eroded its share among younger consumers drawn to low prices and faster product cycles.<\/p>\n

ASOS has been working to rebuild its fast-fashion appeal among shoppers in their twenties, introducing a new commercial model and clearing older inventory. <\/p>\n

Yet analysts say its efforts to re-engage customers are taking longer than expected. <\/p>\n

“ASOS’ attempts to re-engage customers is taking longer than expected,” Deutsche Bank analysts Adam Cochrane and Benjamin Yokyong-Zoega wrote.<\/p>\n

They noted that weaker sales in the second half mean adjusted earnings before interest, tax, depreciation and amortization will miss consensus forecasts by around 5%.<\/p>\n

Cost cuts boost margins but sales revival remains uncertain<\/h2>\n

Despite the disappointing revenue outlook, ASOS emphasized that profitability is improving. <\/p>\n

The group pointed to \u201cmeaningful\u201d cost-saving measures implemented between March and September, which are expected to deliver benefits in the new financial year. <\/p>\n

Margins have improved as the retailer focused on what it called \u201chigher quality sales\u201d and avoided steep discounting.<\/p>\n

Berenberg analysts said gross margins were moving higher and could strengthen further as ASOS continues to adjust its sales and distribution model. <\/p>\n

They estimate revenue at constant currency fell 7% in the second half of the fiscal year, leading to a 10% drop across the year as a whole.<\/p>\n

Stock outlook: investor confidence hinges on sales revival despite profit gains <\/h2>\n

However, questions remain over ASOS\u2019s brand equity and ability to achieve sustainable growth. <\/p>\n

JP Morgan analysts said they \u201cstruggle to become more constructive\u201d on the stock despite acknowledging progress on cost control and efficiency.<\/p>\n

Deutsche Bank analysts said that while ASOS has dealt with inventory overhang and introduced a new commercial model but boosting sales is proving a challenge. <\/p>\n

“The online fashion retailer remains on the right track but investors may soon start questioning whether it can deliver sales growth without hitting margins,” they said. <\/p>\n

Looking further ahead, ASOS maintained its guidance for fiscal 2026, saying profit and free cash flow should be in line with market expectations. <\/p>\n

Management insisted that the company has strengthened its foundations and is well placed to generate long-term value.<\/p>\n

But analysts warn that profitability gains alone will not satisfy investors unless sales growth returns. <\/p>\n

\u201cAfter strengthening its foundations by clearing old stock and cutting costs, the focus shifts to growing sales without hitting profitability,\u201d said Matt Britzman, senior equity analyst at Hargreaves Lansdown. <\/p>\n

\u201cAmid intense competition, the road ahead looks bumpy.\u201d<\/p>\n

The post ASOS stock slumps as analysts warn profit gains may not offset sales weakness<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

British online fashion retailer ASOS warned on Tuesday that annual revenue would come in below market expectations, citing subdued consumer demand and a slow recovery in its fast-fashion business. The London-listed company said profit would still rise more than 60% from last year but land at the lower end of its previously guided range of <\/p>\n","protected":false},"author":1,"featured_media":43935,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-43934","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/43934","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=43934"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/43934\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/43935"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=43934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=43934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=43934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}