Growth trend set to continue at Asos

Online retailer Asos is expected to report a surge in full year sales this week as it reaps the benefit of increased international expansion.

A consensus of City analysts expect the firm to clock a 35% rise in sales to £1.9 billion tomorrow, with profits up 24% to £79.3 million.

At its last trading update in July, Asos booked a 38% and 41% rise in sales in the US and Europe respectively as it continues to see a boost from the Brexit-hit pound.

George Mensah, analyst at Shore Capital, said: “International sales growth continues to predominantly drive the topline of Asos, and continues to be a strong focus for management.

“We view this year and 2018 as a period of heavy investment as the company lays the foundation for further internationalisation.

“This investment is already helping to accelerate overseas sales growth.”

The company has previously said that, as a net exporter, the collapse in the value of sterling has helped its international sales rocket and allowed it to plough more into price cuts.

Paul Rossington, analyst at HSBC, said he expects Asos to continue to re-invest the positive foreign exchange tailwind to keep prices down.

In August, Asos also announced that it will ramp up its US offering by spending £30m opening a new factory in the country.

The company currently has a small fulfilment centre in the US which manages 25% of all stateside orders, with the remainder being dispatched from the UK.

The 10m unit capacity facility is part of the retailer’s plan to refocus on the core markets of the UK, Europe and the US.

Mr Mensah said Asos’s recent foray into cosmetics will lead to revenue growth.

“We expect the roll-out of own-brand beauty and activewear to generate incremental revenue,” he added.

The group’s results come while British high street retailers are facing a torrid time as the collapse in sterling increases import and product costs and batters consumer confidence.

Retail titans including John Lewis and Next have been among the biggest hitters to warn over turbulent high street trading this year.

Asos is expected to reveal improved figures.