Britain'S Largest Fashion Business ASOS Early Warning Of Sharp Decline In Profits

< p > Britain's largest fashion business ASOS PLC (ASC.L) opened five days ahead of schedule on Thursday before the opening date, announced a new performance data, which showed that sales growth continued to slow down, while the annual profit forecast was cut, resulting in its stock price dropping 44% after opening, creating the largest single day decline since 2001, and the market value instantly evaporated 1 billion 700 million pounds.

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< p > ASOS PLC (ASC.L) pointed out in the three quarter financial report that intensive sales promotion, strong growth of low margin British products and strong sterling will reduce the EBIT pre tax profit margin from 6.5% in the previous financial year to about 4.5%.

Nick Beighton, group chief financial officer, expects the annual pre tax profit of around 45 million pounds after the publication of the earnings report, which is equivalent to 17.7% less than the 54 million 700 thousand in fiscal year 2013. Next year's EBIT interest rate a href= "//www.sjfzxm.com/news/index_c.asp" > profit margin < /a > will rise to about 5-6%.

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< p > this is the second major setback of ASOS PLC (ASC.L) in the past three months. Its performance in March 18th was not as good as expected in the market, but it still plans to increase investment and boost international market expansion at the expense of profitability, which has led to a 20% drop in share price.

Over the past two years, the share price of ASOS PLC (ASC.L) has doubled, but its price earnings ratio above 100 times also means that its share price is liable to generate huge fluctuations.

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< p > in the three quarter ended May 31st, the ASOS PLC (ASC.L) retail revenue in the UK increased by 43% to 91 million 880 thousand pounds, significantly faster than the 32% in the first half of the year, but the retail sales in the international market, which accounted for 62%, rose only 17% to 151 million pounds a year, far below the 35.2% increase in the first half of the year.

The total retail revenue increased by 25% to 243 million pounds, and the group's total revenue was 248 million, up 26% over the same period last year.

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< p > Numis Securities Ltd. Nomura Securities analyst said in the research report, "a href=" //www.sjfzxm.com/news/index_c.asp "ASOS" /a "PLC (ASC.L) performance is disappointing, but still believe that the quality of its customers is enough to support its global growth prospects.

The bank lowered ASOS PLC (ASC.L)'s pre tax profit for the year ended August 31st from 64 million to 44 million.

Cantor Fitzgerald LP reduced the target price of ASOS PLC (ASC.L) from 5000 pence to 3500 pence, maintaining the "hold" rating.

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"Although the earnings performance in this fiscal year will not be as good as expected due to multiple unusual factors, our capital expenditure is still under control," said P Robertson ASOS PLC (ASC.L) CEO Robertson in the latest quarterly report.

He further analyzed the above factors in the analyst conference, pointing out that the initial costs of technology and infrastructure investment, and < a href= "//www.sjfzxm.com/news/index_c.asp" > China's business < /a > are controllable factors. The chief financial officer, Nick Beighton, revealed that some of the investment projects will be re established to reduce the price. But the sterling strength of these uncontrollable conditions will continue to damage the international market's revenues. For example, the currencies of two important overseas markets, Australia and Russia, have depreciated by more than 20%. This also led to the fact that Australia, which is the largest international market in the group six months ago, has dropped to third place, and accounts for only 8% of the total retail sales.

In addition, the group must also increase sales in some countries by a maximum of 25%, and in order to offset the impact of price increases on consumption intention, the group has increased the intensity of promotional activities, resulting in a vicious circle.

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< p > to the deadline, ASOS PLC (ASC.L) reported 3115 pence in early trading, narrowing to 31.13%, although it has spread to the UK and European fashion and luxury business concept stocks following its downtrend.

Boohoo.com PLC (BOO.L) dropped by 14% at most, Supergroup PLC (SGP.L) dropped by 4.77%, and Yoxx SpA (YOOX.MI) in Italy dropped by more than 5.5%.

At present, ASOS PLC (ASC.L) has dropped to about 2 billion 700 million pounds.

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