SHARE OF THE WEEK: Asos latest fashion brand to report results

Investors are confused as Asos becomes the latest high-profile fashion brand to report results next week.

The retail slump has been caused by the cost of living crisis affecting poor buyers, with rising inflation and interest rates hurting people’s wallets.

Asos faces a tough test to convince the city it’s on track with Wednesday’s full-year results after fellow fashion companies Boohoo and Next released dismal earnings estimates last month.

The company revealed in a trading update in September that earnings would be at the lower end of expectations.

But more worryingly, it warned of weak sales in August after positive June and July. Asos attributes this to belt-tightening consumers and a slow start to fall and winter stores.

As a result, the company lowered its annual growth forecast to 2 percent, from the 4 percent indication to 7 percent it released in June.

Asos also expects to end the year with debt of around £150m, well beyond the £75m to £125m range.

The only hope is that an increase in the dividend payout can assuage investor fears.

A look at the stock, down 77 percent this year, shows the challenge.

HSBC retail analyst Paul Rossington said: “We expect uncertainty about the demand outlook to drive the share price. We are also concerned about the impact of increased competition in international markets, especially in Europe.’