Fast-fashion retailer ASOS (ASC.L) has reported weaker August sales and said that it was “cautious” about the outlook for consumer spending as shoppers slash spending to cope with the cost of living crisis.
The UK-based group said it saw “good growth” in June and July and expects total sales for the year to 31 August to remain within market expectations.
However, it said it is now witnessing “the impact of accelerating inflationary pressures on consumers and a slow start to Autumn/Winter shopping”.
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Profits are now anticipated to be “around the bottom end of company guidance” due to the slowdown in activity.
In June, ASOS lowered its guidance for adjusted pre-tax profit to between £20m ($23m) and £60m, down from its previous guidance of £110m to £140m.
Shares in London-listed ASOS have tumbled 78% in the past 12 months, were trading up in early deals on Friday.
“While ASOS remains cautious about the outlook for consumer spending, it continues to make strategic progress and manage the business for the current environment,” the company added.
It comes only three months after Asos previously cut its sales and profit outlook, warning in June that it witnessed a sharp rise in returns as shoppers started to cut back their spending.
In June, the retailer promoted chief commercial officer Jose Antonio Ramos Calamonte to the top job and named non-executive director Jorgen Lindemann as chairman in a clean sweep at the helm.
Fashion retailers have struggled since the height of the pandemic as shoppers buy more products, try them on at home and return many of the goods bought.
The owner of rival Primark, Associated British Foods (ABF.L), also warned that its customers' disposable income was declining and that higher costs will squeeze its profit margin in the next financial year.