(Bloomberg) -- Asos Plc shares tumbled as the U.K. online fashion retailer reported an unexpected slowdown in international sales while it increased spending on technology.
Sales growth in Europe slowed to 31 percent, missing the company-compiled consensus estimate for growth of 39 percent. Asos now expects full-year sales growth to be toward the lower end of its forecast range of 25 percent to 30 percent, the London-based company said in a statement Thursday.
The shares fell as much as 12 percent, their biggest loss since April.
The lowered guidance will “weigh heavily on investor sentiment,” according to Bloomberg Intelligence analyst Chris Chaviaras.
Asos has been investing heavily in its logistics and technology in a bid to sustain sales growth as Amazon.com Inc. steps up its efforts in fashion. The company expects to make capital expenditures of as much as 250 million pounds ($330 million) this year. While web retailers are benefiting from the increasing tendency of shoppers to buy online, all clothing sellers are battling a shift in spending from clothing to experiences.
The U.K.’s physical retailers are also continuing to struggle. E-commerce now accounts for 18 percent of U.K. retail sales -- almost double the level in the U.S. -- and this year has already seen the collapse of Toys “R” Us U.K. and electronics retailer Maplin.
DFS Furniture Plc said Thursday it expects earnings before interest, taxes, depreciation and amortization to fall this year after a summer slowdown in sales. The shares fell as much as 12 percent in early London trading Thursday and were down 4.3 percent at 9:43 a.m.
The uncertainty wrought by Brexit has hurt big-ticket spending in the U.K. DFS has struggled this year amid weak consumer confidence and a subdued U.K. housing market. Floor-coverings retailer Carpetright Plc is shutting dozens of stores and tapping shareholders for cash to stave off collapse.
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