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Asos sales rise but are stunted by adverse currency movements

Sales at Asos continued to rise in the first two months of the year despite currencies in Australia and Russia affecting revenues.

Retail sales rose 26% year-on-year in the two months to February 28 as sales in the UK rose 21%.

International sales rose by 29% and now make up 65% of the total compared with 63% last year. Sales in the US grew by 41% as EU sales increased 57%, however revenues across the rest of the world only rose 3%. During the two months retail gross margin dropped 30 basis points on last year.

Despite this there has been a slow down compared to growth over the last half year. In six months to February 28 retail sales rose 34% with UK revenues rising 32% and international turnover increasing 35%.

Asos has accelerated its investment in warehousing in the UK and Germany and in IT, and will invest at least £68m in capital expenditure in the current year, up from an expected £55m. The etailer said this would increase its sales capacity to £2.5bn per year, although this investment as well as the investment in its China start-up will reduce EBIT margin in the current financial year to 6.5%, which will be particularly felt in the first half.

Chief executive Nick Robertson said after delivering strong sales and margin growth over the first six months of the year the business was confident of achieving £1bn for the full year.

“We ended the period with 8.2 million active customers, a 36% increase year on year,” he said. “Retail sales for the two months to February were strong in all territories except Rest of World where we experienced adverse currency movements, notably in Australia and Russia.”

 

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