British retailer Asos increased sales and profit before tax for the financial year ending August 31, according to results released on Monday. Despite this, shares are falling after the announcement of the departure of the CEO and the announcement that the company expects a decline in profits next year.
The retailer alerted investors to the impact of consumers’ gradual return to in-store purchases, a situation that should continue over the next year and penalize accounts. as a reaction, Shares of the British retailer fell nearly 15% earlier in the afternoon, as low as 2,364 pence.
In the past fiscal year, Asos saw group revenue grow to 3.9 billion pounds, a 22% increase over reported sales the previous year. The company reported a pre-tax profit of £193.6m (€228.07m), up 36% from last year’s profit of £142.1m (€167.4m). According to the note from Asos, the rise in sales was driven by the purchase of “leisure” apparel, due to the context of the pandemic.
The company expects that with the vaccination process allowing restrictions to be lifted in different parts of the world and some returning to normal, profits could fall next year to between 110 and 140 million pounds (129.5 to 164.9 million euros). According to Reuters, this is a 35% decrease compared to analyst estimates.
“Looking forward, although our performance over the next 12 months is likely to be affected by volatile demand, global supply chain pressure and costs, we are confident in our ability to seize opportunities of any size that lie ahead,” notes Matt Dunn, the company’s chief operating officer. and Chief Financial Officer, quoted in a statement.
The end of the pandemic isn’t the only adjustment the company needs. The CEO will be leaving with immediate effect. Nick Payton, who has been leading the company for 12 years, will leave Asos. The company reports that it is already looking for someone to fill the position, in a process that will be led by Ian Dyson. The latter will take over the duties of “chief”, replacing Adam Crozier, whose departure has already been announced.
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