The online fashion retailer, which made profits of more than £190m last year, expects profits for the year to the end of August to be around £20m. “Having seen good growth in June and July, sales in August were weaker than expected,” the company said in a trading update. “This reflects the impact of accelerating inflationary pressures on consumers and the slow start to autumn/winter shopping.” The sales decline prompted the company to downgrade its annual growth forecast to about 2%, from guidance of 4% to 7% issued in June. Asos expects earnings to come in at the lower end of its guidance, issued in June, of £20m to £60m. The company’s shares soared during the coronavirus pandemic as consumers turned to online shopping, but are now languishing at a 12-year low. On Thursday, Primark’s owner warned it expected lower profits next year as it grappled with a strong dollar and rising costs that had increased annual energy bills by around £100m. Earlier this summer, Asos said it was experiencing a “significant increase” in returns in the UK and Europe, which would have a “disproportionate impact on profitability”. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. Asos customers in their twenties have been particularly affected by the cost of living crisis, with rents rising in many countries, along with the cost of petrol and food. In May, rival online retailer Missguided called in administrators after it filed for liquidation from clothing suppliers owed millions of pounds.
