ASOS upgrades sales and profit outlook on strong demand

LONDON: British online fashion retailer ASOS forecast full-year sales and profit significantly ahead of market expectations, saying it was benefiting from stronger than anticipated underlying demand and less products being returned by shoppers.

Shares in ASOS were up 8.5%, extending gains in 2020 to 36% ater it said revenue growth for its 2019-20 year was now expected to be between 17% and 19%.

It forecast pretax profit in the region of 130 million pounds to 150 million pounds ($170-$196 million), up from 33.1 million in 2018-19.

Several British clothing retailers, including Next and Superdry, have recently reported beter than expected trading as Britain emerged from coronavirus lockdown.

ASOS, whose fast fashions are popular with shoppers in their twenties, said it had expected to see return levels normalise once lockdown measures eased and customers were able to ship returns and felt more comfortable doing so.

However, it said returns were not increasing at the rate it had anticipated due to strong demand during the lockdown for activewear and a shit to more deliberate

It said this reflected robust demand for “lockdown” categories, such as activewear, and a prolonged shit in customer behaviour towards more intentional purchasing across all ranges.

German online fashion retailer Zalando said on Tuesday it had also benefited from a decline in returns, though it assumes the fall will be temporary.