Asos shares have divebombed as much as 15 per cent after the online fashion giant warned of major potential profit declines moving forward.
This morning Asos announced the shock departure of its chief executive of six years Nick Beighton as it became the latest major ecommerce player to warn that pandemic-driven growth was set to slow sharply.
Since Friday Asos’ share price has plummeted from 2800p to 2376p, despite it posting a full year revenue rise of 22 per cent to £3.9 billion.
While underlying profits for this year grew 36 per cent to £193.6 million, in line with consensus estimates, Asos warned that next year they could fall as much as 43 per cent.
“Higher labour and freight costs are just one problem, but Asos has also had trouble getting hold of the right stock, so in some cases, although demand has strengthened, the group couldn’t meet it,” Hargreaves Landsdown’s equity analyst Sophie Lund-Yates said.
“Supply chain problems are going to continue for the foreseeable future, which is some explanation for why next year’s sales outlook is so disappointing.
“Asos is a huge player in the world of online shopping, but the pandemic has chivvied a lot of its bricks and mortar rivals to up their own digital offerings, so it will need to peddle hard to keep growing market share. This bump in the road comes as there’s a change in leadership at the top, adding a layer of strategic risk.”
Beighton, who has been with Asos for over a decade, gave little insight into why he was departing with immediate effect at such a crucial time for the retailer.
While no permanent successor has yet been found, the company’s current chief financial officer Mat Dunn will “lead the business on a day-to-day basis” and take the title of chief operating officer.
His departure comes just weeks after chairman Adam Crozier announced he would be leaving the business to join BT, painting a worrying picture for many investors.