Sales up 30% at ASOS in lead-up to Christmas
Young fashion etail giant ASOS has, an anticipated, posted strong trading figures for the lead-up to Christmas with the UK turning in "an exceptional performance".
Analysts had expected ASOS to be one of the industry's festive season winners and in the four months to 31 December it achieved total group revenues of £808.4m, up 30% year-on-year. Total retail sales his £709.4m, also up 30%.
All territories achieved strong growth with the UK, despite market challenges, up 23% year-on-year at £300.9m, the US up 24% at £102.4m and the EU up 42% at £235.2m. Rest of world was up 34% at £151.9m.
The business achieved promising growth on all KPIs with active customers up 19%, average basket value up 3% and average order value up 8%. Conversation rate improved by +20bps while gross margin was up 80bps, which was in line with projections. In total ASOS took 20.2m orders during the period, which was an increase of 30%.
ASOS CEO: Nick Beighton
Chief executive Nick Beighton said it was maintaining its FY18 financial guidance but said that full year capital expenditure would be at the upper end of the previously indicated range of £200m-£220m as the business continued to invest in technology and infrastructure.
"I’m pleased to report a strong performance during the period including peak. 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,” Beighton said.
The trading statements to be released by major retailers since Christmas have so far gone to form with the fast-fashion and online brands such as ASOS, Boohoo and QUIZ having a stellar season, along with those brands with clearly differentiated propositions such as Selfridges, Ted Baker and Joules. However department stores House of Fraser, Debenhams and M&S have struggled, along with young fashion chain New Look.
Senior market analyst as www.cityindex.co.uk Fiona Cincotta said she found it "hard to find much to fault" with ASOS' update: "ASOS has sailed through what ended up being a nightmare festive trading period for many of its rivals over on the High Street.
"Revenue growth in constant currency terms has actually improved slightly on its previous trading update, putting the company comfortably on track to its meets its ambitious annual sales guidance. Gross margins are continuing to improve, while a slight increase in capex guidance will be of no great concern, given the investment opportunities Asos on offer.
"ASOS shares do trade at a high valuation, leaving little margin for error, though it's hard to find much to fault in today's trading update," she said.
