ASOS Plc (ASC.L) today warned of 15 million pounds of additional tariffs following Br-exit.Even so, the British online fashion retailer, selling both women’s and men’s clothing, was able to raise its full-year earnings outlook on the back of strong holiday sales.
ASOS PLC (ASC.L) rose as much as 5.3% to 5,470 pence in trading on Wednesday, extending its gain into 2021 to 14.4%.
The group noted that consumer demand during the Covid-19 crisis had exceeded expectations, and that its multi-brand model and investment in product, price and promotion had enabled it to capture the growing number of consumers engaged online.
In the first four months ended Dec. 31, Asos PLC’s retail sales grew a robust 36% in its home market, well ahead of international growth of 18%.The festive season saw a surge in sales of beauty products and jogging pants, with chief financial officer Mat Dunn noting that UK customers wanted to “maximising Christmas” with restrictions. Overall revenues rose 24 per cent year-on-year to £1.364.1 billion in the first quarter, helped by a clampdown on returns after England’s second quarantine in November.
The number of active users reached 24.5 million at the end of the quarter, up 1.1 million from the same period a year earlier.The Covid-19 crisis triggered a special product mix and additional airfreight costs that caused gross margins to regrow by 90 basis points.
With both England and Scotland reintroducing national home segregation at the start of the New Year, ASOS PLC believes the Covid-19 crisis has had a positive impact on interim pre-tax profit of 40 million pounds and therefore expects pre-tax profit for the current year to the end of August to be at the top end of market expectations of 115 to 170 million pounds.In the last financial year the group made pre-tax profits of £142.1m, more than tripling year on year.
Nick eighton, chief executive of ASOS Plc, stressed that the Covid-19 crisis continued to create uncertainty and continue to affect customers’ lives, and that the cautious outlook for the second half of the year remained unchanged.Mat Dunn said the group would voluntarily absorb the cost of additional tariffs arising from the new trade deal between the UK and the EU.
The group has a large distribution center in Berlin, Germany, which mainly serves the European market. However, Nick Beiighton pointed out that as ASOS PLC covers a large number of self-owned brand products and 800 third-party brands, some European orders still need to be arranged and delivered by Barnsley distribution center in the UK.As part of its growing business, ASOS PLC announced last week that it is investing 90 million pounds in a new distribution center in Staffordshire to handle clothing and beauty products, which is expected to create 2,000 jobs over the next three years.
Post time: Jan-19-2021