ASOS chiefs buy shares to show support after profits warning
ASOS chairman and CEO have both acquired a chunk of shares in the fashion etail giant in a show of support following its profits warning of yesterday.
Yesterday chairman Adam Crozier bought 4,200 shares at £23.839 per share making a total investment of £100,000. Today CEO Nick Beighton invested almost £50,000 in 2,369 shares priced at £21.05 per share.
Their actions came after ASOS announced yesterday that it had revised down its profits expectations for the year to between £30m to £35m as it continued to be dogged by issues bedding in major new warehousing hubs in Atlanta, USA, and Berlin.
The company said that sales had increased by 12% to £918.8m in the four months to 30 June. UK sales growth had been robust at 16% but sales growth in the US (at 12%) and the EU (at 5%) had been suppressed by continued logistical issues that had led to stock shortages.
Beighton said he believed the issues would be resolved by the end of September. However the news, which was ASOS's third profits warning in recent months, sent its shares tumbling from £27.43 at close of trading on Wednesday to £21.07 at close of trading last night.
Allianz, which is ASOS's 6th largest shareholder with a 5% stake, reacted positively to the news of the share purchases.
Marcus Morris-Eyton, porfolio manager at Allianz, told The Times: “The latest profit warning comes after a frustrating year for the retailer. It is reassuring to see the chief executive and chairman buying shares, but this profit warning again delays the hoped for margin recovery at Asos, and comes at a time when investor confidence is low in the sector.”
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