Online fashion giant Asos delivered surging retail sales up 37% to £186m in its second quarter as its gross margin dipped.

Total sales for the three months to February 28 were driven by overseas sales, which grew 45% in the period. Overseas sales now comprise 59% of total revenue, which is up 2% year on year.

But UK sales came in ahead of expectations, soaring 28% to £75.5m in the three-month period after strong trading in December.

For the half year to February 28, Asos delivered total sales growth of 34% to £352m with UK sales up 26% to £137.5m.

But the etailer reported retail gross margin was down against last year, falling 50 basis points in the second quarter and 60 basis points in the first half.

Asos chief executive Nick Robertson said he was delighted” with its “robust” first-half performance.

“The strength of our UK performance continues to put pressure on our achieved retail gross margin. We expect this to improve during the remainder of the financial year as we annualise last year’s price investments and achieve planned sourcing gains.

“We remain positive in our outlook for the year to August 31, 2013 and continue to trade in line with expectations.