ASOS expects £14m hit to profits after Russia exit

ASOS has said it expects to see a £14m hit to profits after its decision to halt trading in Russia following the invasion of Ukraine.

In its interim results for the 6 months to 28 February 2022, the online fashion retailer reported a £15.8 million pre-tax loss, compared to profit of £106.4 million a year earlier.

However, the company highlighted that revenue in constant currency had grown by 4 per cent, in line with guidance despite “ industry-wide supply chain constraints impacting stock availability and ongoing COVID19 restrictions.”

The company’s growth also appears to have been affected by the removal of Covid-related restrictions, with a return to High Streets leading to an increase of 0.3 million new customers over the six month period, to a total of 26.7 million.

The company’s statement said this slower customer growth was as a result of cyclical trends due to “a period of exceptional customer acquisition in the prior year when High Street retail was closed.”

UK sales were up 8 per cent to £895.5 million over the period, and up 11 per cent in the US.

The company highlighted the growing impact of supply chain disruption and rising freight costs, and warned about the prospect of reduced consumer spending due to inflation and higher energy bills in the coming year.

Matt Dunn, chief operating officer and chief financial officer at ASOS, who is leading the company while it searches for its new chief executive, said: “ASOS has delivered an encouraging trading performance, against the continuing backdrop of significant volatility and disruption. The team has acted with determination and pace and is making good early progress on the strategic plan for the next phase of growth, as set out at our CMD last year.

“While much remains to be done, we have a clear plan for each of the three key pillars – our platform, consumer offer, and international expansion – and are already seeing positive signs of progress across the business. We’re confident of the benefits these efforts will create and our continued ability to deliver.

He added:“We’ve entered the second half of the year well placed, and believe that our stock position, with increased product availability and newness, will stand us in good stead. We remain mindful of the potential impact on demand from the growing pressures on consumer spend and will continue to be responsive to any changes in market conditions as we progress the work started in the first half to deliver on our ambitions.”

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