Online retailer ASOS hit by teething problems at US warehouse

British online retailer ASOS said its completely new warehouse in Atlanta, United States, struggled to cope with demand in its second quarter, resulting in a dip in U.S. sales in addition to adding to challenges from the French in addition to German markets.

Chief Executive Nick Beighton said the company’s U.S performance was behind plan because higher-than-expected demand at its completely new facility caused a significant short-term despatch backlog, which had right now been cleared.

“These delayed shipments will be recognised in (quarter three) in addition to U.S. trading can be right now regaining momentum,” he said on Tuesday.

Beighton said ASOS, which targets style-conscious twenty-somethings, continued to outperform in Britain, with sales growth of 14 percent from the quarter, nevertheless its two biggest markets in continental Europe – France in addition to Germany – continued to be challenging.

“We will be increasing investment in cost in addition to marketing from the second half, particularly in France in addition to Germany,” he said. “Given the actions we are taking together with an improving U.S. performance, we believe the group will deliver stronger growth from the second half.”

He said he was confident the group would likely meet the full-year targets This particular lowered in December, when This particular cut its sales growth forecast to 15 percent in addition to its earnings before interest in addition to tax (EBIT) margin target for the year to around 2 percent, blaming a poorly executed Black Friday promotional campaign.

ASOS reported total retail sales up 11 percent in constant currency to 641.3 million pounds ($850.4 million) from the quarter to February 28.

The retailer’s shares were trading 5.3 percent lower on Tuesday morning.