"Retail margin up by -640bps," boasted Asos's corporate website about last quarter's financial performance. Eh? Surely a minus number implies a fall. Indeed it does: in the language used by the outside world, Asos's gross profit margin plunged by 6.4 percentage points in the last quarter of the financial year. Not pretty.

Asos's upside-down reporting hints at deeper problems that have afflicted the go-go online clothes retailer. The company has been run on the assumption that years of rapid growth in sales lie ahead and that the benefits of greater size would blow warm breezes through profit margins, which would only ever go up.

It's not that simple, as Asos is being obliged to admit. Tuesday's was the third profit warning in six months. Forget pre-tax (as opposed to gross) profit margins of 7-8%, which was the old dream; for the time being, Asos will run at 4-5%.

Aside from an unfortunate fire at the large Barnsley distribution depot, there is little wrong with the UK operation, where sales were a third higher than a year ago. The problems are all overseas, which is a serious rip if you're trying to sell to 200 countries. In the last quarter, Asos's sales were flat in the US. The "rest of the world" segment – which includes Australia, Russia and China – fell 5%.

Blame the strength of sterling, suggests Asos. A dress that sells for £20 in the UK suddenly cost £23 or £24 for an Australian customer, says its chief executive, Nick Robertson. OK, but surely a business with a sterling cost base and a sterling pricing structure should have noticed that currency movements can play havoc with its competitive clout. New software is on the way to provide local pricing, says Robertson. It can't arrive soon enough.

But here's what it will cost: "significant investments in our international pricing and proposition" mean pre-tax profits will be flat next year. Even if that is achieved, Asos's progress will look almost pedestrian: £40m of pre-tax profit in 2012; £54.7m in 2013; £45m in 2014; and £45m in 2015.

To think, at the start of this year, Asos was valued at £6bn and some people were willing to pay 100 times expected earnings to own the shares. The share price has crashed from £70 to £22 since then, teaching optimistic punters two hard – but very old – lessons. First, global leadership never comes easily. Second, growth in profits is more important than increases in sales.

Asos remains a smart and impressive operation, but it's a third lesson that's the next problem: competitors catch up.