ASOS online clothing store, hands holding iPhone with screen asos app. High quality photo
Asos share price is having a very bad day as the share plunged 10.9% below Monday’s close. The report of a £296.7 million pretax loss for the last fiscal quarter caused disappointment among investors. As a result, the shares of the online fashion retailer plummeted to their new 3 monthly lows level.
However, the overall stock market in the UK remained positive as the FTSE 100 index was up 0.3% at press time. The British benchmark index was largely carried by Next plc, who upgraded its full-year profit guidance for the fourth time in six months. GSK also followed by raising its profit outlook for the second time this year.
Investors are not happy as Asos reported £3.5 billion in revenue which represented an 11% decline. The sales figures in the UK remained £370.3 million, which was also down 15% from the year prior. As a result, the EBIT was a loss of £29 million, which is worse than the expected £24 million loss.
In addition to the mixed earnings report, Asos also expects a sales decline of 5% – 15% in 2024 despite showing improvement in 2023. The company also expects its operations to run on a new commercial model and inventory to reach pre-COVID levels at the end of 2024. This may create an increased selling pressure on ASOS share price.
The LON: ASC chart shows the price trading in the 332p-406p range after the colossal 54.4% sell-off in May. In October, the price attempted to break above the range high of 406p but failed to gain strength above it.
A retest of 332p which is the range low seems to be on the cards for the bears provided the current bearish sentiment sustains. The current status of the RSI and MFI indicators also points towards this bearish AOS share price forecast. The only way ASOS share price forecast can flip bullish is if the price reclaims 370p, which is the middle of the current trading range.
This post was last modified on Nov 01, 2023, 15:01 GMT 15:01