Asos said in a conference with analysts on Friday that sales growth had slowed from 69 per cent in the first quarter to 53 per cent in the second, dragged back by a severely hit UK market, which results to be its main one.
“With costs and stock tightly managed and retail margin ahead of prior year, we are confident of achieving results in line with market expectations,” advanced Nick Robertson, CEO of Asos.
CEO Nick Robertson told Reuters he had underestimated the impact of the economic slowdown on his business, which targets internet-savvy 16 to 34-year-old women when looking to emulate the designer looks of celebrities. Second-quarter UK retail sales grew by 1% compared with the same period last year to £44m, and slowed from 15% growth in the previous three-month period. Soon after releasing its quarterly report, Asos titles slid 7.2 per cent to £13.99 per share.
“I am pleased to report a strong first half performance. Our retail sales grew 60% over the comparable period, with our International business more than compensating for the economic challenges facing our UK customer base”, summarized Robertson in an official communication.
It is worthy a note to remember that since June, when shares in Asos rose 19 per cent (hitting the £25 per share) after Goldman Sachs speculated that expansion into China could boost the company’s market capitalization by 50 per cent, the online retailer´s shares have fallen by over 40 per cent. Since then, the online retailer has launched three new international websites in Australia, Spain and Italy. “During the period we launched three more country specific sites in Australia, Italy and Spain taking the total number of ASOS sites to 7 (including the UK),” reminded the CEO of the company.
UK-listed retailers with international exposure have recently outperformed their high street-focused peers and many industry observers have expressed confidence that Asos’s customer base of 16 to 34-year-old women and its focus on internet sales would enable it to avoid the worst of the malaise, reported the Financial Times . Following this trend, sales from Asos’s international operations rose 141 per cent year-on-year to £62.6m, also slowing from 160 per cent growth in the first quarter.
As per reported by Reuters, Singer analysts said the fall in ASOS's share price had been overdone, given its potential for overseas growth. "Although UK growth could be rebased, strong international momentum from a highly immature base, underpins a stable revenue forecast agenda and continues to drive our enthusiasm for the ASOS investment case," Citi analysts added.
Asos said in a conference with analysts on Friday that sales growth had slowed from 69 per cent in the first quarter to 53 per cent in the second, dragged back by a severely hit UK market, which results to be its main one.
