Asos's share price soared 17 per cent this morning as it appeared to be back on track, reporting quarterly growth of 19 per cent after a difficult period that included a profit warning.
The etailer, which took a stumble a few months ago, appears to be back in its comfort zone.
Retail sales were up 19 per cent for the three months to February 28, with the UK – Asos's most mature market – rocketing 30 per cent, while international sales were up 12 per cent.
International sales make up less of the total now than they did last year – 56 per cent of group sales came from outside the UK, compared with 60 per cent last year. Given the strength of the pound, that is not necessarily a bad thing.
However gross margins were down 320 basis points year-on-year.
For the first half, retail sales are up 14 per cent, with the UK powering growth once again, up 27 per cent compared with a five per cent increase on the international side.
Gross margins are down 270 basis points.
Why it's interesting
Having gone through the phase of being able to do no wrong, last year was something of an annus horribilis for Asos. After issuing a profit warning in the spring, it suffered a warehouse fire that hit sales in the summer and then continued to report poorer-than-expected results throughout 2014.
Profits were also affected by the strengthening pound against certain currencies, particularly a weak Australian dollar. This has been offset slightly by the introduction of “zonal” pricing.
So the fact it has reported better than expected results this morning will come as something of a relief to management, and of course shareholders.
In addition Asos is increasingly becoming something of a bellwether for British consumer sentiment, so an increase in UK sales will be welcomed by other retailers, both online and high street.
What Asos said
Chief executive Nick Robertson noted the “strong growth” in the UK, and described Asos's international sales as showing “encouraging momentum”.
He added: “Our investments in our warehouse and IT platforms are on track. We expect profit before tax for the full year to be in line with market expectations."