Asos's share price surges as etailer reveals double-digit profit and sales growth as retailer consolidates return to strength

Catherine Neilan
Follow Catherine
Teen Vogue's Fashion's Night Out Block Event
Source: Getty

Asos' share price surged more than 5.1 per cent this morning, after reporting six month double-digit sales and profit growth.

The figures

The etailer grew group revenue 21 per cent to £667.3m in the six months to 29 February, with UK retail sales up 25 per cent while international sales grew 18 per cent.

Gross profit was up 22 per cent to £324.8m, with gross margins up 50 basis points to 48.7 per cent.

Pre-tax profit was up 18 per cent to £21.2m: last year's figure included a £6.3m reimbursement from the warehouse fire, which was reinvested in Asos' international pricing strategy.

All that means Asos is on track to meet its full year sales forecast.

Why it's interesting

After a period of gloom, which included a string of profit warnings and that fire, as well as uncertainty during the handover from founder Nick Robertson to new chief executive Nick Beighton, Asos has well and truly come out the other side.

In October it revealed that it had smashed through the £1bn sales barrier - today's figures consolidate the improvements made.

Investors will take particular comfort from the strong international growth, which has struggled of late.

What Asos said

"We've had a good start to the year and I'm pleased with progress on a number of fronts," Beighton said. "These results demonstrate improving momentum in the business... Particularly encouraging is the 17 per cent growth in our active customers to 10.9m, with benefits from our investment in our technology and logistics delivering 21 per cent growth in visits to our sites and growth in average order frequency, basket value and conversion.

"We delivered profit before tax of £21.2m, growth of 18 per cent, in line with our expectations. I'm pleased to confirm that we are on track to achieve our previously stated sales and margin guidance for the full year."

In short

An encouraging first half for Asos.