ASOS recommend as a ‘hold’ for investors as figures disappoint

As ASOS updates the market Helal Miah, investment research analyst at The Share Centre, explains what it means for investors.

“ASOS disappointed the market this morning as revenues sales growth fell below market expectations. Revenues were up 16% compared to the same period last year and 27% for the full year, resulting in the share price taking a hit in early morning trading. The fire at its Barnsley distribution centre in June have impacted figures more than expected and it is estimated to hit sales by around £25-£30m. The strength of sterling compared to the same period last year has also dampened the figures from international operations.

“We continue to recommend ASOS as a ‘hold’ for investors while the business goes through a difficult time. Competition is strong and heavy investment into infrastructure will take its toll on the earnings in the short term. However, the business is still growing rapidly and the brave contrarian investor could consider this as a long term investment.”