Asos shines in H1, talks of “great progress” as global ops buzz to a weak pound
A particularly strong mid-term report from Asos Tuesday morning. The UK-based online fashion retailer saw overall retail sales leap 38% (up 31% currency neutral) in the six months to February 28.
As expected, it was its global business that sparkled, with international sales up 54%, boosted by the weaker pound. But UK ops also did well, rising a “solid” 18% despite a more promotional market.
It sold £889.2m worth of goods at retail and £548.4m of that came from outside of its domestic market.
Pre-tax profits, meanwhile, rose 14% to £27.3m as gross profit came in at £440m.
The only blip was a fall in retail gross margin, down to 47% from 47.4% while overall gross margin dropped from 48.9% to 48.3%. Although that dip was expected by Asos, analysts and shareholders were more concerned, with its shares price falling almost 4% in late morning trade.
Back to the good news department. Active customers rose 29% to over 14m (up to over 5m in the UK), average basket value increased 3% and average order frequency rose 4%. Oh, and total orders shipped hit 23.3m, up 33% on-year.
That came as its m-commerce transactions headed towards 60% of its total, it boosted its logistics capacity for Europe and it worked on a plan to grow faster in the US, the group’s third-largest market.
The retailer also said its mid-term outlook for sales growth remains unchanged at around 20-25% a year. Although for the current financial year that was upped to 30-35%. Full Year PBT is expected to be broadly in line with market consensus.
CEO Nick Beighton said: “These are a strong set of results, showing great progress across the business. International growth… has been excellent and with the Rest of the World segment a standout performer. We’ve accelerated our significant infrastructure and technology projects which remain on track, and Eurohub 2 went live in March.
“Given the current momentum we are seeing, Asos is making good progress towards its ultimate goal of becoming the world’s number-one destination for fashion-loving 20-somethings.”