PERFECT HARMONY
Online fashion retailer enjoys strong trading both at home and abroad
ONLINE FASHION retailer Asos reported strong trading in both its home market and overseas, boosted by investment in lower prices.
Asos, which is Barnsley’s biggest employer, said total sales in the four months to June 30 rose 32 per cent to £676m, driven by strong growth in the US and Europe, where revenue rose 38 per cent and 41 per cent respectively.
The group, whose high-profile fans include singer Rita Ora and former US First Lady Michelle Obama, has its main warehouse in Barnsley.
Asos is investing £23m in its Barnsley warehouse this year.
The investment includes further upgrades to the facility’s canteen, locker room and relaxation spaces, as well as the creation of a wellbeing centre for staff, new office space and a brand new product sorting machine.
The warehouse, which employs around 4,000 people, was recently awarded ISO 9001/14001/18001 accreditation for exceptional management, environmental management and health & safety.
It was also awarded a prestigious ROSPA Gold Award for workplace health and safety.
The company said it expects full-year sales to be 25 to 30 per cent higher after international figures leapt 52 per cent in the four months to the end of December.
In the UK, revenue rose 16 per cent to £234.6m.
Asos has previously said that as a net exporter, the collapse in the value of the pound has helped its international sales rocket and allowed it to plough more into price cuts.
Chief executive Nick Beighton said: “Strong half one sales momentum has continued through the third period supported by our ongoing investment in our customer proposition and in price.
“This good performance has been underpinned by advances across all areas of our business including retail, technology, warehousing, delivery solutions and customer care.”
Asos said it remains on track to report full year pre-tax profit of £79.4m.
Analyst John Stevenson at Peel Hunt said: “Looking ahead, Asos is moving towards the new financial year with clear trading momentum and the outlook for next year’s foreign exchange tailwind is expected to be in the region of 4 to 5 per cent for the year ahead.”
Consensus forecasts point to 24.8 per cent sales growth for 2018 to £2.4bn.
“Given the current momentum and some further foreign exchange benefits to come, coupled with accelerating levels of innovation, we would expect sales growth rates to come in ahead of current forecasts,” said Mr Stevenson
“The next question is the extent to which this may deliver enhanced profit delivery too. Our sense is that both sales and profit expectations look light, and we expect consensus forecasts to rise over the next few months.”
The group’s buoyant results come while most other retailers are facing a torrid time.
John Lewis has warned over a “turbulent and challenging” high street amid cost pressures from the rising inflation and higher costs and a dramatic shift in consumer spending.
Lord Wolfson, the chief executive of Next, has also warned of another tough year ahead.
We would expect sales growth rates to come in ahead of forecasts. John Stevenson, analyst at Peel Hunt