Asos investment boosts year-end sales performance
UK-based online fashion retailer Asos benefited from investment in technology and its 'try before you buy' offer to deliver a 30% increase in sales in the final months of 2017.
Group sales were up 30% on a reported basis to GBP808.4m (US$1.15bn) from GBP621.3m a year earlier, while total retail sales were also up 30% to GBP790.4m.
Asos described its UK performance as "exceptional" despite a "challenging market" as it saw UK retail sales jump 23% to GBP300.9m. International sales were up 32% to GBP489.5m.
Retail gross margin was up 80 basis points on the prior year, in line with its expectations. The retailer has maintained its full-year guidance, but now expects capital expenditure to be around the upper end of its previously indicated range of GBP200-GBP220m.
"I'm pleased to report a strong performance during the period including peak," said CEO Nick Beighton. "We achieved an exceptional performance in the UK, whilst momentum in international sales continued. We acquired 2.6m active customers year on year and saw encouraging movements across all key customer KPIs.
"Velocity in our technology programmes continued, with a record number of releases. Our customer proposition was further enhanced in the UK with the launch of 'Try Before You Buy' and 'Asos Instant', our same day delivery proposition. Following this strong start to the year, we remain confident in our full year guidance and delivery of our planned investments in infrastructure to support our global ambitions."
Sofie Willmott, senior retail analyst at GlobalData, said Asos's agility and willingness to adapt to changing shopping habits, coupled with its confidence to invest in new initiatives, are key contributors to its ongoing success.
However, she warns: "Though Asos is seemingly untouchable with double-digit UK growth the norm, the retailer must remain aware of smaller young fashion online pureplays such as boohoo.com, Missguided and lesser known brands like SilkFred and Missy Empire, who are creeping up and vying for a larger share of shopper spend. Given its track record and ability to quickly react, these competitors are unlikely to stop Asos in its tracks and the online pureplay is set for another fantastic year ahead."