ASOS Is Struggling WIth Australian Results Dragging Down Profits

asos.com

Online fashion and beauty store ASOS has announced its third profit warning in six months.

Since launching its Australian website and Sydney headquarters last year, the online retailer continues to struggle against a lower dollar and competitive local stores.

Since the launch in Australia, the dollar has fallen 5.3% against the pound, while ASOS’s prices have risen around 20%.

ASOS said its pre-tax profit for 2014-15 would be similar to the £45 million ($72.8 million) it expects from the 2013-14 financial year – far from the £62 million profit forecast.

The retailer has experienced one of the the slowest growth periods in the company’s history, only improving international sales by 6%

CEO Nick Robertson told Reuters that the slowing in the international market is a first for the company.

“This is definitely a shift around from what we’ve been seeing historically. For the past two, three years we’ve seen international outperforming the U.K. and that’s swung around.”

The e-retailer plans to cut prices in Australia and offer free returns to combat the lackluster Australian results.

A fire at its UK distribution center in June is also said to have cost it up to £30m in lost sales.

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