Asos fairytale: sales up by 31 percentThursday, 20 September 2012
"We approach our new financial year with continued confidence," said Asos Chief Executive Nick Robertson.
Fourth quarter UK sales rose 15 percent to 50 million pounds, while international sales increased 42 percent to 91 million pounds and now represent 65 percent of the total. The market had been looking for a year on year gain of around 30% for the group as a whole; Panmure Gordon had predicted UK sales would be up 17 percent and international sales 47.3 percent higher. Peel Hunt went for a humbler 44.9 percent increase in international sales.
Jaana Jätyri, chief executive of fashion trend forecaster, Trendstop.com, explains the success of ASOS: "For the time being, at least, the Asos fairytale continues. With its global exposure, competitive prices and ability to keep pace with changing trends, Asos has managed to both hedge itself and stay a step ahead.”
Asos said its retail gross margin improved by 70 basis points over the period even though it cut prices. The firm, which has changed its year end from March to August, said profit for the five months ended August 31 and pro forma full year were expected to be in line with expectations, reported Reuters.
"By continually anticipating the latest trends, Asos gives people what they want just as they want it. Label-obsessed shoppers get the latest designer trends at low prices, and that's no small achievement. Don't underestimate the role free worldwide shipping has played in Asos' recent success,” added Jätyri.
Commenting the news for ‘The Telegraph’, John Stevenson, analyst at Peel Hunt, said: “We see continued investment in the Asos proposition delivering a sustainable medium-term run rate of 25 to 35 percent annual sales growth. For the year to August 2013, however, we see a year of consolidation as management concentrates on delivering significant platform enhancements to facilitate many initiatives such as zonal pricing and a multi-language/multi-alphabet capability, a pre-cursor to a dedicated Chinese site, amongst others.”
Shares in the firm have risen 23 percent over the last three months hitting a 12-month high of 2,101 pence last week. "Against a challenging backdrop we are encouraged that Asos has kept its rate of sales growth above 30 percent," Canaccord Genuity analyst Wayne Brown said for ‘Sharecast.com’.
"In the coming future Asos' challenge is to keep the offer fresh and relevant to all territories, as the less trend-aware markets are currently getting the slower-moving items from the UK," concluded Trendstop.com’ s chief executive.