Why I think the ASOS share price will rise in 2020 after a poor 2019

first_img Jabran Khan | Tuesday, 28th January, 2020 | More on: ASC Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Jabran Khan has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended ASOS. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Simply click below to discover how you can take advantage of this.center_img Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! The name ASOS (LSE:ASC) resonates with most people in the world of fashion. The company was incorporated in 1999, and within two years ASOS was floated on the AIM (Alternative Investment Market) on the London Stock Exchange.Over the years, ASOS began to grow outside of the UK, offering its products to customers in other countries around the world. Customers in the USA, France and Germany were able to order all their favourite items from the ASOS website by 2010. The year after, websites were launched for those living in Spain, Italy and Australia. In 2013, it launched online stores for both Russia and China.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…ASOS hit a high point in November 2017 when it overtook Marks & Spencer with a market value of £4.89bn.Profit warnings, warehouse and IT issues result in share price declineIn 2018, ASOS issued two profit warnings, citing price cutting to match rivals had not increased sales as expected, coupled with an overhaul in infrastructure. To put into perspective, the share price in March 2018 stood at 7730p, before declining sharply to 2128p by mid-December.ASOS made a pre-tax profit of £33.1 million in the year to August 2019 – in line with July’s guidance of £30-£35 million but down sharply from £102 million in 2017-2018. However, it is worth noting revenue rose 13% to £2.73 billion in this period.Sales in the UK were unaffected; however, issues in two new hubs – in Berlin, Germany and Atlanta, USA – experienced different issues that affected growth. Berlin saw technology improvements as manual order processing changed to automated processing, which caused issues, and Atlanta failed to keep up with customer orders and ran out of stock.How ASOS can bounce back after a tough yearASOS can bounce back due to the growth plan that, despite operational issues last year, continues to remain intact. The US market is key to the revival, with my research concluding that ASOS does not have a competitor who can offer the wide range of products alongside a great user shopping experience that ASOS can. The US accounted for only 13% of sales last year.The key driver, sales, were up in the UK by 15% in the 12-month period, 9% in the US and 12% in the EU. Orders have increased impressively by 14% year on year group-wide. The ASOS leadership team are also making all the right noises about global growth, which provides further confidence in the ASOS journey moving forward.Black Friday 2019 was a much better year compared to 2018 as ASOS revealed overall sales grew 20% to £1.1bn in the four months to 31 December 2019, up from the 13% growth recorded in the year to 31 August 2019. Retail consultancy Retail Economics said: “These figures show that the retailer is back on track. Past investments in digital and logistics infrastructure improved their range and availability, showing early signs that it’s beginning to pay off.”I believe the recent figures and investment in infrastructure represent lessons learnt as well as a growth plan beginning to bear fruition internationally and locally, which will mean an upturn in the ASOS share price. “This Stock Could Be Like Buying Amazon in 1997” Why I think the ASOS share price will rise in 2020 after a poor 2019 See all posts by Jabran Khanlast_img

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