Asos sales jump 38pc in festive trading
Online fashion retailer Asos enjoyed a big jump in sales in the run-up to Christmas, putting it firmly among the sector’s winners from the key festive trading season.
Asos, whose shares have almost trebled in the last year, said in a trading update that its sales rose 38pc to £335.7m in the four months to December 31.
That compares with a rise of 47pc in the fourth quarter of the previous financial year and forecasts in the City for growth of 36pc.
Sales rose by 37pc in the UK, 28pc in the US and 69pc in Europe, with Nick Robertson, chief executive saying the retailer had benefited from better delivery options – such as an improved next-day delivery service – and additional payment methods.
However, investors expressed concerns about a slowdown in growth in the rest of the world to 19pc, which was impacted by a weakening of the Australian dollar.
Mr Robertson said he was “not overly concerned” by a slowdown in the US and Asos’s rest of the world division, in which Australia accounts for 40pc of sales.
But shares in Asos dipped 210p, or 3pc, to £66.50 following the trading update.
Analysts at Barclays said: “The release has something for both the bulls and the bears to pick up on.
“The bulls would point to the very strong markets in the UK and EU which are far from mature, while the bears could say that the US and Australia have weakened a bit more than anyone would expect and hence some of the long term growth could be endangered.
“In our view the quarter showcases the strength of Asos’s business model and its online superiority but investment for longer term growth is necessary.”
Asos, founded in 2000 by former advertising executive Mr Robertson, has been the big success story in British retailing in recent years. Its fast-changing fashions have been snapped up by internet-savvy twentysomethings and attracted fans including United States First Lady Michelle Obama and singer Rita Ora. It has almost 8m customers around the world.
The company’s shares have soared 164pc over the last year, giving it a market value of almost £6bn – the equivalent of six Debenhams and only £2bn less than Marks & Spencer, Britain’s biggest clothing retailer.
Asos said retail gross margin rose 90 basis points year-on-year in the period, reflecting tighter stock control.
“These results were driven by significant improvements to our customer proposition, including better delivery options, additional payment methods and the roll out of our premier service in key international markets,” said Mr Robertson.