Sep 19, 2013
ASOS to beat profit forecasts as sales soar
Sep 19, 2013
LONDON, England - ASOS expects a small beat to forecasts for year profit, helped by another jump in quarterly sales and better margins, the fast-growing British online fashion retailer said on Thursday.
While Britain's traditional high street stores have suffered as consumers' disposable incomes have been squeezed, online retailers have fared better. ASOS in particular has bucked the trend, tapping into demand from value-seeking twentysomethings for both branded and own-label products and expanding into overseas markets.
The firm, which targets young women looking to emulate the designer looks of celebrities such as singer Rita Ora and model Cara Delevingne, said retail sales increased 47 percent to 207.9 million pounds ($332 million) in the three months to Aug. 31, its fiscal fourth quarter.
That compares with a third quarter rise of 45 percent and took the total for the year to 753.8 million pounds, up 40 percent.
Fourth quarter UK sales jumped 49 percent to 74.1 million pounds, with international sales up 47 percent to 133.8 million pounds, driven by stronger growth in countries where it has dedicated websites and in-country teams, notably in the United States, France, Germany, Italy and Spain.
The company, whose celebrity fans include U.S. First Lady Michelle Obama, made 63 percent of retail sales overseas in the year and plans to strengthen that with the launch of a Chinese-language website in October.
Founded as As Seen On Screen Ltd in 2000 and floated on the Alternative Investment Market (AIM) a year later, ASOS is the major success story of British retailing in recent times. It is targeting 1 billion pounds of annual sales by 2015.
Shares in ASOS, which have more than doubled over the last year closed at 4,833 pence on Wednesday, valuing the business at 3.93 billion pounds.
ASOS said retail gross margin increased 460 basis points year-on-year in the quarter, reflecting the annualisation of price cuts last year. Full year gross margin was up 100 basis points.
Prior to the update analysts' were forecasting a consensus pretax profit for the 2012-13 year of about 53 million pounds, up from 44.5 million pounds in 2011-12.
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