Asos Sales Double as Britons Seek Online Discounts
Asos Plc, the U.K.’s second-largest online clothing retailer, said sales more than doubled in the last two months as shoppers sought discounts online, and said growth in full-year profit will meet analysts’ estimates.
Revenue rose 118 percent in the nine weeks ended Jan. 16, the London-based retailer said today. Growth accelerated from the 107 percent pace of the first half.
U.K. Internet retail sales climbed 14 percent in December, Capgemini said this month, defying the economic slowdown as online retailers offered bargains and the ability to shop around. Discounts and free weekend delivery offers reduced Asos’s gross margins by a “a couple of percentage points,” Chief Executive Officer Nick Robertson said by telephone.
“Sales have come in well ahead of expectations, but margins have been a bit disappointing,” Jean Roche, an analyst at Arbuthnot Securities with a “strong buy” recommendation, said in a phone interview.
Asos fell 17.25 pence, or 6.2 percent, to 262.25 pence at 9:35 a.m. in London trading. Before today, the stock had gained 11 percent this year, compared with larger rival Next Plc’s 9.8 percent advance.
“We have had another great Christmas,” the CEO said in the statement. “Sales, visitors, conversion and average basket value were all at record levels.”
Profit Estimates
Asos expanded its offer with an ‘AsosRed’ discount section, international Web sites, childrens’ wear and more products with other retailer’s brands, such as Ted Baker Plc and Whistles.
