LONDON (Reuters) - ASOS (ASOS.L), the British online fashion retailer, said fast-changing product ranges and an expanding international customer base would help it to maintain sales growth and defy tough conditions in the UK clothing market.
Britain’s more established clothing retailers including Next (NXT.L) and Marks & Spencer (MKS.L) are struggling to grow sales, with data from market researcher Kantar Worldpanel showing the British fashion market witnessed its steepest decline since 2009.
ASOS, however, forecast sales growth of up to 25 percent for the 12 months to August 2017, building on the 26 percent jump it reported on Tuesday for 2015-16.
“I‘m expecting the major growth to come from international but I‘m not expecting UK to fall away substantially,” Chief Executive Nick Beighton told reporters on a call.
Shares in ASOS, founded in 2000 for fashion-conscious twentysomethings, traded down 7.5 percent to 4,925 pence, having been on a strong run going into the results -- they hit their highest level for two and half years on Monday.
More than half of the online retailer’s sales come from international markets, giving it an advantage over UK-focused shops given the devaluation of the pound since Britain voted to leave the European Union on June 23.
But despite concerns over consumer confidence due to economic uncertainty since the vote, the CEO said he expected British consumers to keep buying.
“I think we’ll see another strong performance from the UK,” he said.
ASOS’s rapid range changes, it adds over 4,000 new styles a week to its website, and its strong social media presence, will help it continue to grow, said Beighton.
ASOS has faced criticism from unions and media over working conditions at its main warehouse in northern England, but the retailer called the commentary inaccurate and misleading in its earnings statement.
ASOS posted underlying pretax profit of 63.7 million pounds for the year to August 31, ahead of analysts’ average forecast of 62 million, and a 37 percent jump on the previous year.
Profit was boosted by the weakening of sterling versus the U.S. dollar and euro in the wake of Britain’s vote to leave the European Union.
Reporting by Sarah Young; Editing by Keith Weir