AO World’s shares have plummeted 10 per cent as it became the latest major retailer to warn that its growth is being stunted by “ongoing supply chain issues”.
The online electronics retailer warned investors this morning that its profits this year would be “lower than expected” due to the “ongoing” impact of driver and supply chain worker shortages hammering retail supply chains across the UK.
Despite the “challenging market dynamics in both the UK and Germany” AO said it still managed to achieve six per cent and three per cent sales growth in both markets respectively.
AO’s sales figures also suffer from tough comparisons after the retailer saw a spike in sales during the pandemic, with sales on a two-year basis rising 66 per cent.
Meanwhile underlying pre-tax profits are expect to come in between £35 million and £50 million in the year to March 31 2022, down from £64 million a year earlier.
Analysts at Jefferies said that AO’s shortfall in the UK was “fairly understandable, given well-known challenges around driver shortages, global supply chains, and the difficulties of predicting growth against demanding comparatives.”
However, it added that it growing competition hampering sales in Germany was more concerning and means that AO “has questions to answer regarding its international growth aspirations.”