Asos shares hit by sales warning

Shares in Asos have fallen more than 10% after the online clothing giant said sales growth this year would be at the lower end of forecasts.

The drop in its shares came despite Asos reporting a 22% rise in sales to £823.9m in the four months to 30 June.

The retailer said the latest trading period had "started well", and that it was on track to hit profit targets.

But it said sales growth this year would be "likely towards the lower end" of the expected 25%-30% range.

In early morning trading, the shares were down 11% at £57.76.

Asos' shares have risen by 13% over the past year. Its shares were first listed in 2001 at 20p.

The company, which targets "fashion-loving 20-somethings", has enjoyed rapid growth over the past few years. Traditional High Street retailers have struggled to cope with the wave of competition coming from the likes of Asos, and other online specialists such as Boohoo.

Asos says it adds 5,000 new lines each week, which it says is the equivalent of an entire Oxford Street shop.

Analysts are expecting Asos to report full-year profits of £101m, up from £80m the year before.

Chief executive Nick Beighton said: "I am pleased with the way the business has traded over the last four months and we are on track with our plans for the year.

"We remain confident of delivering another year of strong growth."

Sustaining high levels of growth will be a "challenging task" for Asos, according to Sofie Willmott, senior retail analyst at GlobalData.

"With such a strong track record and high expectations from stakeholders, ASOS must continue to innovate at a rapid pace to remain a leader in the online market," she said.