Global supply bottlenecks and cost increases caused the British clothing retailer Asos Plc to slip into the red in the first half of the 2021/22 financial year. This emerges from an interim report published by the company on Tuesday.
According to this, group sales in the six months ended February 28 were 2.00 billion British pounds (2.40 billion euros). This corresponded to an increase of one percent compared to the same period of the previous year. Adjusted for exchange rate changes, sales increased by four percent. In view of significant delivery difficulties, the low growth rate was in line with expectations, the company said.
Earnings were impacted by higher freight and labor costs, increased marketing spending and the absence of government aid from which the company had benefited in the prior-year period. The negative effects of these factors could only be partially offset by targeted cost-cutting measures. The clothing retailer had to post an operating loss of £4.4 million after an operating profit of £109.7 million in the first half of the past financial year. Adjusted for special effects, earnings before interest and taxes (EBIT) fell from 116.2 to 26.2 million pounds sterling (-77 percent). The bottom line was a net loss attributable to shareholders of £13.5 million (€16.1 million). In the first half of 2020/21, the group had posted a surplus of 81.8 million British pounds.
Despite the persistently difficult general conditions, the company continues to expect stronger sales growth in the second half of the year than in the first six months. This was due to fewer delivery problems and the omission of the Covid-19 protective measures, which had dampened demand for occasion wear in the previous year, among other things. However, the cessation of business activities in Russia, which was decided at the beginning of March due to the Ukraine war, will probably reduce the rate of increase by two percentage points and also weigh on the result, the group said.