Asos said sales in July and August were impacted by wet weather, causing it to reduce its annual profit forecast.
Asos said poor weather compounded weaker online demand for clothing. In the quarter, total sales fell by 15% to 3 September, with the UK down 16%. The cashflow of the company resulted in a significant drop in its sales washout, which resulted in a net loss of a total of £600 million. Since 2009, July has been the wettest month in England.
The update from Asos was in contrast to Next, Britain's biggest clothing retailer, which rose its full-year profit expectations for the third time in four months last week after better ranges, the sunny spring and pay rises for many of its customers helped lift sales.
Asos sought an equity injection of £80m from shareholders and borrowed in May from specialist lender Bantry Bay Capital to provide it with financial headroom as it seeks to return to profitability within a year, by cutting costs, simplifying its processes and becoming more innovative.
Asos' CEO, José Antonio Ramos Calamonte, said the company's performance was a 'leaner and more robust' after the cost savings and stock reductions.
The cost-of-living crisis, rising inflation and changing consumer trends post-pandemic have been a difficult period for Asos, Paulley said. The business is hopeful that the turnaround plan, which was implemented by José Antonio Ramos Calamonte, could help it get back on track by focusing on profitability instead of revenue growth.