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ASOS adds to retail gloom with profit warning

ASOS adds to retail gloom with profit warning
FILE PHOTO: A model walks on an in-house catwalk at the ASOS headquarters in London April 1, 2014. REUTERS/Suzanne Plunkett   -   Copyright  Suzanne Plunkett(Reuters)
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LONDON (Reuters) – Online fashion group ASOS <ASOS.L> cut its annual sales growth and profit margin forecasts on Monday, becoming the latest British retailer to highlight very poor November trading.

The warning adds to the pre-Christmas gloom in Britain’s retail sector. Last week Sports Direct <SPD.L> said November trading was “unbelievably bad”.

ASOS lowered its sales growth forecast for the 2018-19 year to 15 percent from 20-25 percent previously and cut its earnings before interest and tax (EBIT) margin target for the year to around 2 percent from 4 percent.

ASOS also said it would reduce planned capital expenditure to 200 million pounds.

“Whilst trading in September and October was broadly in line with our expectations, November, a very material month for us from both a sales and cash margin perspective, was significantly behind expectations,” ASOS said.

It said growth in online clothing sales was the weakest in recent years, reflecting economic uncertainty in its markets and a weakening in consumer confidence.

ASOS said its total sales rose 14 percent to 656 million pounds in the three months to Nov. 30.

(Reporting by Sarah Young and James Davey; editing by Jason Neely/Keith Weir)

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