UK online retailer ASOS said its new US warehouse in Atlanta had struggled to cope with demand in its second quarter, resulting in a dip in US sales and adding to challenges in the French and German markets. 

Chief executive Nick Beighton said the USperformance of the company, which targets fashion-conscious millennials, was behind plan because higher-than-expected demand at its new facility caused a significant despatch backlog.

This backlog had now been cleared. 

"These delayed shipments will be recognised in (quarter three) and U.S. trading is now regaining momentum," Beighton said today. 

The problems in Atlanta come as a further blow after the group issued a shock profit warning in December, reflecting a downturn in trading and sending its shares to a four-year low.

ASOS today reported an 11% rise in total retail sales at constant currency rates to £641.3m in the quarter to February 28, below its 15% revised target for the year and a long way off the 25% the market had come to expect from an online fashion leaders. 

Beighton said ASOS continued to outperform in Britain, with sales growth of 14% in the quarter, but its two biggest markets in continental Europe - France and Germany - continued to be challenging. 

"We will be increasing investment in price and marketing in the second half, particularly in France and Germany," he said. 

"Given the actions we are taking together with an improving U.S. performance, we believe the group will deliver stronger growth in the second half," he said. 

Beighton said he was confident the group would meet the full-year targets it lowered in December, when it also cut its earnings before interest and tax (EBIT) margin target to around 2%.

It blamed a poorly executed Black Friday promotional campaign for the cut.