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Asos posts surge in H1 profit, sales jump 25 percent

By Prachi Singh

Apr 8, 2021

Retail sales at Asos plc grew 25 percent to 1,976 million pounds, while pre-tax profit increased by 253 percent to 106.4 million pounds, with consistently strong performance throughout the period. The company said in a statement that growth was in part driven by exceptional performance in the UK where retail sales grew by 36 percent in P1 and accelerated further in P2 with growth of 46 percent and 18 percent growth in the EU.

Commenting on the company’s first half trading, Nick Beighton, Asos CEO, said: “These record results, which include robust growth in sales, customer numbers and profitability, demonstrate the significant progress we have made against all of our strategic priorities and the strength of our execution capability. The swift integration of the Topshop brands and the impressive early customer engagement is also especially pleasing.”

Review of Asos performance in H1

The company added that visits growth was 19 percent, while ABV stepped back 3 percent on the year as customers continued to purchase ‘lockdown’ categories with lower ASP such as loungewear and Face + Body. The company’s active customer base grew in the first half by 1.5 million to reach 24.9 million active customers, up 12 percent year on year.

The company further said that pre-tax profit increased by 253 percent to 106.4 million pounds boosted by the continued Covid-19 impact of 48.5 million pounds, with intentional purchasing driving more efficient sales growth, offsetting Covid-19 related cost drags. Gross margin reduced by 200bps in the period.

Basic and diluted earnings per share increased by 197 percent to 82.1p and 198 percent to 81.9p respectively.

Asos reports strong results across core markets

The company’s total UK customer base grew 15 percent on the year, to 7.8 million with investment in the period supporting growth in new customers. Visits growth was 31 percent, reflecting the continued improvements made to product, promotions and engagement in the first half.

EU retail sales grew 18 percent and customer momentum continued throughout the period, with 0.7million customers added in the first half driving growth of 14 percent year on year. This was underpinned by continued strong performance in the French market, driven by increasing online penetration, with customer growth of 20 percent and strong Premier subscription growth of 29 percent. Germany saw good results supported by non essential retail closure in the middle of the half.

US retail sales grew by 16 percent, while order growth was challenging, reflecting the reduction in occasion wear customers, with a high level of occasion wear mix in this market. The US total active customer base grew at 6 percent to 3.3 million, with new customer growth underpinning total customer growth.

ROW retail sales grew by 16 percent. Asos said, growth in Australia remained strong despite difficulties with delivery proposition due to Covid-19. Israel and Saudi Arabia continue to represent an increasingly significant proportion of the company’s ROW segment, with Israel seeing strong growth in excess of 60 percent. Russia proved more challenging, as overall demand slowed.

Image:Asos, Facebook