Asos is surging ahead in the UK – but international growth and currency headwinds are still dampening the etailer's earnings.
Retail sales were up an impressive 20 per cent for the four months to 30 June, with the UK up 27 per cent, while international sales were up 16 per cent. International sales make up proportionately less of total revenue now than they did a year ago, accounting for 59 per cent of total sales compared with 61 per cent.
Retail gross margins are up 280 basis points.
The number of Asos' active users has risen 11 per cent to 9.7m.
Why it's interesting:
Asos had a challenging 2014, but it seems as though much of its woes – particularly any in the UK – have been shrugged off.
However, the continued strength of the pound is dampening overall figures: total sales were at 24 per cent on a constant currency basis, while international sales were up 23 per cent.
All that means while sales are now expected to be at the higher end of Asos' guidance, earnings will remain at what has been previously forecast.
What they said:
Chief executive Nick Robertson said: “After accounting for our price investments during the period, the full year gross margin is nonetheless expected to remain in line with last year, assisted by tighter inventory control and strong full price sales.
“We anticipate that sales for the full year will be at the higher end of our guided 15-20 per cent growth range. We have increased investment in our people and our customer proposition, particularly in relation to free returns trials. We therefore expect EBIT margin to remain at the guided level of around four per cent.”
What the analysts said:
Numis analyst Andrew Wade described it as a “strong” update with gross margins comfortably ahead of expectations “driven by exceptional sell-through”.
“While still only 10 months into Asos two year repricing journey, we are seeing clear positive results and a business which has regained its momentum,” he said. “We retain our positive stance, confident that Asos has a unique proposition."