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Asos: Analyst Reaction

As Asos reports a 41% increase in sales for the month of December, Drapers takes a look at what City analysts make of the etailer’s performance.

John Stevenson, analyst at Peel Hunt, said that although Asos delivered a strong performance, because the UK is operating on a lower gross margin to international territories, the stronger UK mix drives a profit downgrade. “Our 2013 profit before tax estimate is cut to £52m, with consensus likely to be lower at £50m-£51m,” he said.

Panmure analyst Jean Roche, on the other hand, has increased profit before tax estimates because of Asos’s stronger top-line growth. “EU sales were up 65% and although this was helped by a free express delivery trial this is impressive given what other retailers are saying about trade in the Eurozone in particular,” said Roche.

Independent analyst Nick Bubb described the Asos update as “amazing” and said that the only “niggle” was that gross margin was slightly down.

Sanjay Vidyarthi, analyst at Espirito Santo, added: “We think the risks are that guidance will change as a result of the sales mix effect (UK is lower gross margin) and price investment. This should be offset by a stronger sales trend for the year.”

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