British online fashion retailer ASOS warned on profit for the third time in eight months on Thursday, saying it had struggled to overhaul warehouses in the United States and Europe to meet demand.
The group has been a darling of the UK stock market but it issued a shock profit warning in December and in March said its new U.S. warehouse was struggling to cope with demand, hitting sales there and adding to challenges in France and Germany.
ASOS's shares have fallen 55% over the last year and were trading more than 20% lower Thursday. The group said its total sales rose 12% to £919.8 million ($1.14 billion) in the four months to June 30, with sales in the U.K. and the rest of world division robust, up 16% and 14% respectively.
However in the European Union and the U.S. sales were held back by operational issues associated with its new warehouses in Berlin and Atlanta, up 5% and 12% respectively.
"Embedding the change from the major overhaul of infrastructure and technology in our U.S. and European warehouses has taken longer than we had anticipated, impacting our stock availability, sales and cost base in these regions," said Chief Executive Nick Beighton.
"We are clear on the root causes of the operational challenges we have had, are making progress on resolving them, and now expect to complete these projects by the end of September."
The group said it was reducing expectations accordingly. Pretax profit for full-year 2019 was now expected to be 30-35 million pounds after booking 47 million pounds of transition costs and 3.5 million pounds of restructuring costs.
According to Refinitiv data, analysts had been expecting pretax profit of 55 million pounds. It reported profit of 102 million pounds in 2018.
For the balance of the year ASOS forecast sales broadly in line with its year to date performance of up 13%. Full-year retail gross margin was forecast to be down 250 basis points year-on-year.
Capital expenditure guidance was maintained at about 200 million pounds, while year-end net debt was expected to be about 100 million pounds.