ASOS PLC (LSE:ASC) has cut its full-year profit guidance to reflect the impact of inflation on consumer behaviour, it said in a trading statement today.
The company also said it has appointed José Antonio Ramos Calamonte, who joined the company last year to lead commerce, as its new chief executive after Nick Beighton stepped down last year.
To “reflect uncertain consumer purchasing behaviour”, the online retailer now expects adjusted pre-tax profit for the year to 31 August in a wide range between £20mln and £60mln, well down on the £193.6mln profit it made last year, with revenue growth of 4-7%, down from the 10-15% previous guidance and the 20% seen last year.
It said inflation had a “disproportionate impact” on its profitability in the three months through to 31 May this year due to the impact of customer returns.
Chief operating officer Mat Dunn said: "It is too early to tell for how long the current pattern of customer behaviour will continue but we are taking swift and decisive steps to minimise the impacts whilst continuing to deliver against the strategic initiatives we laid out in November that will ensure that ASOS builds for the long-term."
Sales in the UK, its biggest market, and the US rose during the quarterly trading period, by 4% and 21% respectively, while sales in Europe and the rest of the world dropped by 5% and 20% following the decision to suspend sales to Russia on 2 March.
Sales were impacted by an increase in return rates in the UK and Europe, reflecting the toll inflation has taken on consumers.
Gross margin fell 310 basis points to 44% partly driven by higher freight costs, with higher rates locked in during the second half of the year. The company said expects its margin to be adversely affected by between 150 and 200 basis points, reflecting the cost of markdowns and market factors.
Asos reported growth in the Topshop brand and ASOS Design, which it is now selling through a partnership with Nordstrom.