Asos Profit Plunges 22% Despite Sales Boost
Online fashion retailer Asos has seen its half-year pre-tax profit plunge by 22%, despite retail sales being up by a third in the UK.
The fall comes as the firm steps up expenditure on IT and distribution facilities for future growth expectations.
Asos said its pre-tax profit was £20.1m in the six months to February 28, down from £25.7m in the same period last year.
In March the company warned that investments in Germany and the UK to help distribution would impact profit.
It also said start-up costs in China would affect the bottom line.
Last month, the firm said the outlay would disproportionately hit first half-profit and forecast a full-year profit of around £65m.
On releasing the H1 figure the company said: "Asos is not and has never been about the short-term, the scale of the global opportunity remains as exciting as ever."
Barnsley is the main UK warehouse centre for the group.
Around two-thirds of group sales are from the UK and the European Union.
Some analysts wonder if the firm's international growth ambitions may cause overreach.
Its international sales growth of 14% is low relative to other divisions, working from a small base.
Asos was launched in 2000 and listed on London's AIM exchange in 2001. In 2010 it launched American, German and French sites.
The company, which targets people in their 20s, has also had to contend with the rise of Boohoo recently.
Its rival aims to provide fashion for teenagers and people in their early 20s, and its share price jumped 50% on flotation last month.