ASOS Q1 sales expected to improve

Last summer’s set back has certainly dented the company’s figures but sales are set to increase nonetheless.

ASOS packages
Source: Bloomberg

On Tuesday 9 December ASOS is due to release its first-quarter figures. Sales for the online fashion retailer are expected to increase slowly from £245.7 million up to £255 million.

It has been a tough year for the online retailer, having previously been the rising star in the retail community with its cutting-edge moves on the internet. This new status was dented with growth figures at the beginning of the year coming in slightly weaker than expected.

In June this year, one of the company’s three warehouses suffered serious damage following a blaze that police suspect was the work of an arsonist. This cost the company an estimated £30 million in lost sales and damaged over 20% of the company’s stock.  

Black Friday, the day that signals the start of the sales season for retailers, got off to an inauspicious start as sales looked to come in down by 11%. Most of the blue sky that had been attributed to the company has now disappeared and a return to sales growth might be required to revive this.

Since June, the shares have spent the majority of their time trading in a range between £30-£20 and have spent most of the last month bouncing along with the 50- and 100-day moving averages for company. An equally undecided mindset has held over institutional analysts. Of the 24 posting recommendations, five are strong buys, five are buys, nine are holds, four are sells and one is a strong sell.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.