British online fashion retailer Asos warned on Tuesday that annual revenue would fall short of market expectations due to weak consumer demand, with profit expected to land at the lower end of its forecast range.
Shares in the London-listed firm dropped 11 percent in early trade, taking losses for the year so far to more than 40 percent.
ASOS has been working to revive its fast-fashion appeal among its core base of shoppers in their 20s, while cutting costs amid intensifying competition from Chinese rivals and the impact of US trade tariffs.
Britain is ASOS’s biggest market, but the US accounts for about 10 percent of total sales.
The company had previously forecast an adjusted core profit of between 130 million pounds and 150 million pounds ($175 million to $201 million).
Nonetheless, ASOS said profit was still expected to rise more than 60 percent from a year earlier, driven by cost discipline and improved margins.
ASOS said revenue would come in slightly below market expectations. Analysts on average had expected the company’s total sales to fall 8.4 percent on a constant currency basis for the fiscal 2025.
Gross merchandise value is also seen lower than expected as it prioritises “higher quality sales”.
Analysts at J.P. Morgan said they continued to see questions on brand equity into the mid-term, and “struggle to become more constructive, despite some of the strategic steps forward”.
ASOS, however, said it remained confident that its fiscal 2026 profit and free cash flow would be in line with market expectations.
The group pointed to “meaningful” cost-saving measures implemented between March and September that are expected to benefit the new financial year.
By Yadarisa Shabong; Editiors: Mrigank Dhaniwala, Subhranshu Sahu, Louise Heavens
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