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Asos boss: Zonal pricing and tight inventory will lift profits

Asos.com chief executive Nick Robertson has credited its zonal pricing scheme, boosted branded sales in Europe and the US and tight inventory controls for today’s increase in the etailer’s full year profit guidance.

Asos introduced global zonal pricing last October, cutting prices in key markets including Australia and Russia, where prices are up to 30% higher than in the UK.

Today it reported a 16% increase in global sales to £227m for the four months to June 30 compared to a 1% drop for the same period in 2014.

Gross margin was expected to be down 100 basis points for the full year but this has also been increased by 4%, meaning it will be flat year-on-year. Robertson said this was thanks to “tight inventory control and strong full price sales”.

Asos has now increased its full year pre-tax profit guidance by 4% to £47m for the year to August 31.

Robertson said: “We are 10 months into our 24 month investment programme and we are pleased with the strength of the product and merchandising control. Strong EU and US sales boosted our branded performance on the continent.”

The business saw an increase in average basket size over the four months, with “particularly strong” sales from the UK.

“We are pleasantly surprised by our UK customers as sales grow consistently quarter by quarter, it was greater than expected,” said Robertson. “We expect UK sales to remain robust; they are our best foot forward in terms of global sales.”

At the end of June it introduced zonal pricing in Spain, as well as free returns in Italy and Netherlands.

Around 60% of all Asos sales now come from mobiles and active customers increased by 11% year-on-year to 9.7 million people.

 

 

 

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