Online fashion retailer Asos reported a 21 percent rise in sales in the four months to June 30 but said trading in the latter three weeks was more muted as uncertainty over Covid-19 and poor weather, particularly in Britain, impacted market demand.

Shares in Asos, which sells fashion aimed at 20-somethings, were down 8.4 percent at 07:13 GMT after it said it anticipated trading volatility would continue in the near term, given the rapidly evolving Covid situation worldwide.

As a result, it expected its underlying growth rate for the balance of its 2020-21 year to be broadly in line with the prior year period. It still forecast overall full year adjusted pretax profit in line with its expectations.

Asos has traded through multiple coronavirus lockdowns while store-based rivals have had to close shops.

Total revenue was 1.29 billion pounds ($1.79 billion) in the four months to June 30, up from 1.1 billion pounds in the same period last year, as its active customer base increased by 1.2 million to 26.1 million.

But gross margin fell 150 basis points reflecting unfavourable foreign exchange movements, higher freight costs due to global supply chain disruption and a category product mix still weighted to lockdown leisurewear.

It noted that product mix, and higher returns rates, had started to reflect a shift back into occasion wear in recent weeks as Covid restrictions eased.

It said the global supply chain pressures were being driven by global freight capacity shortages and delivery delays coming out of key areas of supply.

“Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global e-commerce fashion market has changed forever, which will drive an increase in online fashion sales over the long term,” said chief executive Nick Beighton.

Prior to Thursday’s update analysts’ average forecast for full year 2020-21 adjusted pretax profit was 198 million pounds, up from 142.1 million pounds in 2019-20.

Reporting by James Davey; Editing by Alistair Smout, Kirsten Donovan

Further Reading: Nordstrom Buys Stake in Topshop With Asos Joint Venture

The American retailer has taken a minority stake in Topshop and the three other brands Asos acquired out of administration in February. The deal paves the way for a wider strategic partnership.