Shares in fashion retailer Asos fell heavily today as it said margins would come under pressure because of increased investment in its IT systems.
The firm, which said it was confident of delivering £1 billion in annual sales, plans to spend at least £68 million on IT and warehousing this year, higher than its previous guidance of £55m.
As a result, it predicted an operating margin of about 6.5 per cent for the year to 31 August, lower than analysts’ forecasts of 7 per cent.
The update came as Asos, which targets 20-somethings looking to emulate the latest celebrity styles, reported a 34 per cent jump in total revenues to £481.7m for the six months to the end of February.
Chief executive Nick Robertson said: “The group delivered strong sales and margin growth over the first six months of the year and we are now confident of achieving £1bn of sales in the full year.
“Retail sales for the two months to February were strong in all territories except ‘rest of world’ where we experienced adverse currency movements, notably in Australia and Russia.”
In early trading, Asos shares were down 914p, or almost 14.5 per cent, at 5,412p.