The unusually rainy weather in July and August caused sales losses at British clothing retailer Asos Plc in the final quarter of the 2022/23 financial year. The company then cut its earnings forecast for the full year on Tuesday.
In the fourth quarter, which ended on September 3rd, group sales fell twelve percent short of the previous year’s level, according to the current interim report. Adjusted for exchange rate changes and special effects, like-for-like sales fell by 15 percent.
While demand performed better than expected in June, it fell short of internal forecasts in July and August due to adverse weather conditions, the company said. Overall, quarterly sales were within expectations.
Because the loss in sales shortly before the end of the financial year had a negative impact on the current cash flow, management cut its earnings forecast for 2022/23. It now expects earnings before interest and taxes (EBIT) “at the lower end” of the previous target range of 40 to 50 million British pounds (46 to 58 million euros). The group plans to present its complete annual results on October 25th.
However, CEO José Antonio Ramos Calamonte emphasized that the clothing retailer had made good progress in its reform efforts over the past twelve months. Asos is now “a leaner and more resilient company,” he said in a statement. Inventories have been reduced by around 30 percent year-on-year through targeted sales. At the same time, order quantities and lead times in purchasing were reduced. With these measures, the company has improved the attractiveness of its range, reduced risks and improved margins, said Ramos Calamonte.