Shares in the company nosedived by 36 percent to 2,660.00p, according to data from Bloomberg at 08:45 GMT. The online retailer had this morning warned it had experienced a “significant deterioration” in trading in the run-up to Christmas. While it delivered sales growth of 14 percent, the group said it “experienced a significant deterioration in the important trading month of November and conditions remain challenging”. ASOS has since slashed its sales growth forecast for the year to August 2019 to 15 percent, down from 20 percent to 25 percent.
Its anticipated earnings margin has been revised down from 4 percent to 2 percent.
ASOS blamed the downgrade in growth expectations to promotional activity across the market, leading it to increase its own special offers, which typically eat into profit margins.
Unseasonably warm weather during the last three months has also seen reduced spending by shoppers, Asos added.
However, ASOS said it continues to “materially outperform” in the UK, although this has been achieved at the cost of more promotional activity than initially planned and consumers buying into lower priced product.
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ASOS added in a stock market update: “Whilst trading in September and October was broadly in line with our expectations, November, a very material month for us from both a sales and cash margin perspective, was significantly behind expectations.
“The current backdrop of economic uncertainty across many of our major markets together with a weakening in consumer confidence has led to the weakest growth in online clothing sales in recent years.
“We have recalibrated our expectations for the current year accordingly.”
In other bad news for the UK high street, Laura Ashley today unveiled it would close 40 stores in the UK.
Chairman Ashley Khoo said the company will reduce the number of UK stores from 160 to 120.
It comes as the retailer pushes ahead with an expansion in China.