April 12, 2016 / 6:42 AM / 4 years ago

ASOS on track to hit year targets as first-half profit rises

LONDON (Reuters) - British online fashion retailer ASOS (ASOS.L) met forecasts with an 18 percent rise in first-half profit and said it was on track to achieve its sales and margin guidance for the full year.

A model walks on an in-house catwalk at the ASOS headquarters in London April 1, 2014. REUTERS/Suzanne Plunkett

Established in 2000 for fashion-conscious twentysomethings, ASOS was an early ecommerce success story, but is seeing growing competition from the likes of Germany’s Zalando (ZALG.DE) and British rival Boohoo (BOOH.L), as well as from traditional store-based chains improving their online offerings.

ASOS said on Tuesday it made a pretax profit of 21.2 million pounds in the six months to Feb. 29, in line with analysts’ average forecast and up from 18 million pounds in the same period last year.

Retail sales rose 24 percent on a constant currency basis to 648.6 million pounds, as the firm grew its active customer base 17 percent to 10.9 million. UK sales rose 25 percent, while international sales were up 24 percent.

ASOS said investment in technology and logistics was bearing fruit, delivering 21 percent growth in visits to its sites and growth in average order frequency, basket value and conversion.

“I’m pleased to confirm that we are on track to achieve our previously stated sales and margin guidance for the full year,” said Chief Executive Nick Beighton, who took over last September from founder Nick Robertson.

In October ASOS forecast sales growth for the 2015-16 year of about 20 percent and a maintained operating margin of 4 percent.

Beighton wants ASOS to concentrate its efforts and investment on its main markets of Britain, France, Germany and the United States.

Last week the firm said it will discontinue local operations in China, with the ASOS.com website now servicing customers in the territory rather than a local website.

Shares in ASOS which listed at 20 pence in 2001, have fallen 18 percent over the last year and closed at 34.03 pounds on Monday, valuing the business at 2.82 billion pounds.

Reporting by James Davey, Editing by Paul Sandle

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