ASOS PLC (LSE:ASC), the online clothing retailer, will be hoping that its interim results, due Wednesday 10 May, can get the share price on the climb back to the heights seen during lockdown.
Since early 2021's highs around 5,700p as Covid worked as a growth catalyst for many online-based companies, the share price has sunk 88% to below 700p as high streets stores re-opened.
The group, alongside its fellow e-commerce fashion retailer, Boohoo, is one of the most shorted London stocks, with a net short position of 4.33%, but could its results have been helped by bad weather recently?
Analysts at Liberum have already expressed concerns that the fast fashion firm’s profit targets are overly ambitious, and it would need to consider an equity raise to enable the investment to reach these goals.
Headwinds from the cost-of-living crisis such as increased input costs and reduced consumer spending could further dent margins ahead of the results, analysts at Hargreaves Lansdown said.
However, they noted that: “Conditions are improving with delivery challenges being overcome now that Royal Mail has reached an agreement in principle with unions.
“ASOS has also been taking steps to trim costs by cutting excess stock levels, winding down storage facilities and reducing headcount. So, investors will be keen to see whether these savings are on track to help the group return to profitability in the second half of the year.”
Record rainfall in March meant high street sales took a hit, while online revenues looked strong.
Shares in the group sunk more than 8% on Thursday, a potentially ominous sign less than a week before earnings are due.