Online fashion giant Asos expects profits to come in at the top end of expectations after a strong Christmas sales performance, particularly in the UK market.
Asos reported group sales up 23% to £1.33bn in the four months to December 31, when UK retail sales surged 36% to £554.1m.
The etailer said the performance “surpassed our expectations” and benefited from investment in product, pricing and marketing, as well as “stronger than anticipated consumer demand for our products”.
Returns were also low, as social restrictions to combat the Covid-19 pandemic were imposed. Asos said such restrictions, which are likely to be in place for several more months, should mean a net benefit to profits of at least £40m in the first half.
Asos’ active customer base increased by 1.1 million to 24.5 million in the period, when growth in new customers offset the impact of existing customers having fewer reasons to buy occasionwear.
While Asos did not change its outlook for the rest of the year and cautioned on the likely economic impact of the pandemic on its core 20-something customer, it expects full-year earnings ”to be at the top end of current market expectations”.
Chief executive Nick Beighton said: ”We are really pleased with the strong performance we have delivered, which is testament to both the strength of our multi-brand model and the hard work of our people. We have continued to execute well and deliver for our customers, whilst investing in growing our business and driving further efficiency through a strong operational grip.
”Looking forward, given the uncertainty associated with the virus and the impact on customers’ lives, our cautious outlook for the second half of the year remains unchanged. However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead.”
Asos also reported that it will shoulder Brexit tariff costs associated with country of origin rules of about £15m this financial year.
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