Online fashion retailer Asos is expected to outline a slowdown in sales growth this week as its profit margins take a hammering from global freight shortages.
The fashion giant saw sales jump during the pandemic as shoppers turned to online shops for comfortable clothes to lock down in.
Analysts said they anticipated freight shortages, currency movements and less lucrative lockdown-focused products to have limited the retailer’s full year profits.
Sales are expected to grow 20 per cent to £3.9bn for the year to August, while analysts are expecting a 35 per cent rise in profits to £193m.
The retailer reported a weakening of trade in the final weeks of the four months up to June.
However, Russ Mould and Danni Hewson, at AJ Bell, said that the scrapping of Covid restrictions was likely to have driven stronger sales over the past few months.
They said: “Sales of occasion wear may have offered some margin support as people started to go out again as pubs, clubs and restaurants began to open more fully.”
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said she also suspected that “things will have picked up in some key markets.”
“More social events on calendars means more outfits to be bought.
“Profitability’s been held back by a higher proportion of less lucrative ‘lockdown’ items, coupled with higher distribution costs, and rising return rates, could mean operating margins are heading in the wrong direction.”
The retailer has previously stressed disruption in its supply chain would not impact consumers
Nick Beighton, chief executive of Asos, told reporters in July: “We have not changed any of our pricing, quite the contrary, we’ve invested heavily in it and will continue to do so.”