Asos bucks the trend as UK, US and Europe all see surging sales
Asos released its Christmas and autumn trading update on Thursday and it showed just how strong a business can be when it gets everything right. The retail backdrop for fashion may be frankly awful in many of its markets but that didn’t stop the pureplay e-tailer reporting a 28% sales surge.
And even the UK, where a raft of retailers have turned in less-than-impressive figures for the period, Asos powered ahead with the kind of growth most rivals can only dream about. That happened as the Try Before You Buy and Asos Instant same-day delivery proposition seemed to go down well in the firm’s domestic market.
In the four months to December 31, total group revenue hit £808.4 million. That was up from £621.3 million a year earlier and translates into that 28% growth on a currency-neutral basis, or 30% on a reported basis.
Digging deeper, we can see a powerful performance in all of its regions. The UK rose 23% to £300.9 million and the US was even better with a 28% surge currency-neutral, or 24% reported, to £102.4 million. The EU region went one better with a 32% currency-neutral leap and a 34% reported one to reach £235.2 million. And the Rest of the World rose 32% currency-neutral, or 34% reported, to hit £151.9 million.
What was so impressive about these figures is that not only did the UK unit continue to grow but it actually accelerated, despite the market being very tough. The reporting period included October, when even many successful retailers struggled, and December, when many rivals said they faced tough trading.
But Asos is clearly firing on all cylinders and said Thursday that active customer numbers rose 19%, the average basket value was up 3%, average order frequency rose 8%, and conversion was up a healthy 20bps. The total number of orders placed hit 20.2 million, a 30% year-on-year rise, and it didn’t have to sacrifice margins to achieve sales growth with the retail gross margin up 80bps.
It didn’t upgrade its full-year profit guidance, despite the sales and margin rises, but that’s no surprise given that it now expects its full-year capital expenditure to be around the upper end of the previously indicated range of £200 million to £220m million.
CEO Nick Beighton called the UK performance “exceptional” and said that “velocity in our technology programmes continued, with a record number of releases.”
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