Asos (ASC) shares fell after second-quarter numbers fell short of consensus estimates, reflecting sluggish growth in the UK and Europe, and logistics issues in the US. At constant currency, sales across the Atlantic dropped 3 per cent following issues with distribution, which chief executive Nick Beighton claimed was the result of demand outstripping supply. While this is “very encouraging” in the long term, Mr Beighton says it caused “a significant short-term despatch backlog”. Delayed shipments will be disclosed in the third quarter, although the group says US trading has regained momentum.
Meanwhile, a 12 per cent reported improvement in European sales reflected difficult markets in France and Germany – the group’s two largest continental territories – although more money should be spent on marketing there in the second half as prices stay low. Growth in the UK has also been slower than expected, and while management expects a better performance here in the latter part of the year, better growth should come from Europe and the US. Finally, the ‘rest of the world’ segment – including Australia – performed well, delivering sales growth of 20 per cent.