Asos shares plunge as it steps up expansion plans
Shares in online fashion retailer Asos have closed more than 8% lower after it announced increased investment plans which it said would hit profit margins.
The firm said it would now spend £68m this year, up from its previous guidance of £55m, to increase warehouse space and improve its IT.
Asos said this would boost its sales capacity to £2.5bn a year, £1bn higher than previous expectations.
The firm also released sales figures that were below forecasts.
In the first two months of 2014, total sales were up 26% from a year earlier, although this was below analysts' expectations of a 33% increase.
The retailer saw its strongest performance in the EU, where sales rose 57% in the period. UK sales rose by 21%, with US sales up 41%.
The group, which focuses on fashion for men and women in their 20s, said it now had 8.2 million active customers, a rise of 36% year-on-year.
"It has been an exceptionally busy period of activity at Asos, with continued growth and accelerated investment," said founder and chief executive Nick Robertson.
David Alexander, retail analyst at Conlumino, said the results were impressive.
"A minor loss of momentum should not detract from an upward trajectory which has seen the fashion retail powerhouse post stratospheric numbers in recent times," he said.