- Prachi Singh |
The Asos Group generated retail sales growth of 27 percent during six months to February 28, 2018 to 1,158.1 million pounds (1,643.6 million dollars), with UK growth of 22 percent to 414.5 million pounds (588.2 million dollars) and strong international growth of 31 percent or 28 percent constant currency to 716.8 million pounds (1,017.3 million dollars). The company said, there is no change to FY18 reported sales or EBIT guidance of 25-30 percent and 4 percent margin respectively, while capex guidance is increased to 230 pounds-250million pounds (326.5 to 354.9 million dollars) in FY18 supporting strong momentum in business. Medium term reported sales growth guidance remains unchanged at 20-25 percent per annum with a 4 percent EBIT margin.
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Commenting on the results, Nick Beighton, Asos CEO, said in a statement: “These results show strong trading at the same time as we are making substantial investment in our future. Our customer engagement is going from strength to strength and we’ve achieved more than a billion site visits for the first time. Alongside our investment in our people and our technology, we are accelerating investment in our distribution and logistics, laying the foundation for 4 billion pounds of net sales.”
Asos sees sales rise across core markets
International retail sales accounted for 63 percent compared to 62 percent last year of total retail sales. UK retail sales, the company said, grew despite a challenging market, aided by new category expansion and proposition enhancements such as ‘Try Before You Buy’.
US retail sales grew by 20 percent or 27 percent in constant currency driven by average basket value and conversion improvements. The company added that USD became a headwind in H1 from a sales perspective as the pound strengthened against the dollar. EU retail sales grew by 40 percent or 32 percent in constant currency driven by strong growth in France and Germany and ASOS Premier launching in new countries including Austria, Ireland, the Netherlands, Belgium, Denmark and Sweden).
Key engagement, Asos said, drove conversion up 20bps and average basket values up 3 percent. Rest of world retail sales grew by 25 percent or 24 percent in constant currency, augmented by an enhanced customer proposition in certain territories. Delivery receipts increased by 24 percent and the number of premier customers increased by 55 percent.
Active customers by February were 16.5million, up 17 percent compared to last year. Group retail gross margin increased by 100bps to 48 percent compared to last year and gross margin (including delivery receipts and third-party revenues) increased by 90bps to 49.2 percent. Basic and diluted earnings per share increased by 11 percent to 29.4p and 29.2p respectively driven by the increase in profit before tax during the year.