A tumble in Asos’s share price wiped more than £380million from its market capitalisation, leaving the online retailer worth £777.5million.
The clothing brand said that due to higher returns rates, as well as the impact of the cost-of-living crisis on shoppers’ desire to spend, it expects its full-year profits for the 12 months to the end of August will now be between £20million and £60million.
That is far below the £110million to £140million that it forecast in January and the £193.6million it made last year.
Chief operating officer Mat Dunn said: “What is now clear, based on the significant increase in returns rates that we have seen, is that this inflationary pressure is increasingly impacting our customers’ shopping behaviour.
“It is too early to tell for how long the current pattern of behaviour will continue, but we are taking swift and decisive steps to minimise the impacts.”
The company, which has named commercial officer Jose Antonio Ramos Calamonte as its new chief executive, reported that its third quarter sales were down by £4.5million to £983.4million.
Asos’s red alert about waning consumer confidence was echoed by N Brown, owner of JD Williams, Simply Be, Jacamo and other firms.
N Brown’s first-quarter revenues were down 2.1 percent to £165.1million, while Boohoo said that its sales had fallen 8.3 percent to £445.7million – an effect of the end of lockdown restrictions, it claimed.
Chole Collins, head of apparel at analyst GlobalData, said that the increasingly tough economic environment means that Mr Calamonte now faces a “huge challenge”.
She added: “With Boohoo also releasing a sombre set of results for the same period and Missguided recently falling into administration, fast fashion seems to be losing its shine.
“Financial uncertainty means keeping up with the latest trends is no longer a priority for many shoppers.”