ASOS profits soar due to overseas sales

Profits at the online fashion retailer ASOS soared over the last year as the firm enjoyed strong trade in international markets such as Australia and America.

The retailer, whose target market is style-conscious twenty-something women, posted a pro-forma pre-tax profit of £40m over the summer, which compares to £12.6m last time. This year it changed its year-end from March to August.

Actual revenues at the fashion site leaped 37 per cent over the year, from 403m to £552.9m, as huge increases in international sales offset slower growth at home in the UK. International sales jumped 64 per cent to £332.6m, with American sales up 91 per cent to £49.6m. Sales in the UK rose 10 per cent to £205.3m.

Nick Robertson, ASOS chief executive, said: “During the period we improved our product offer in terms of range, quality and price, invested in our customer proposition, made progress in developing the ASOS platform and continued to drive efficiencies from the business to fuel our future growth,” he said. “At the same time we have reached the milestone of 5 million active customers worldwide.”

He also said that business remained positive on the outlook for the year ahead.

Tips for the top

Robertson said that recent appointments contributed to the firm’s success, including a new marketing director and supply chain director. ASOS has also recently taken on Kate Bostock, a former top executive at Marks & Spencer, as executive director for product and trading.

Increasing diligence in areas such as sourcing as well as selling third-party brands was also credited for increasing sales. Roberson said that ASOS was focusing on its ‘ASOS’ own-label, which is “sought after both in the UK and even more so internationally”.

Freddie George, an analyst at Seymour Pierce, kept his “hold” rating on ASOS. “We believe the company will not disappoint with their earnings over the next three years and will achieve their longer term target of £1bn of sales by 2015.”

But he was also cautious: “Kate Bostock, the outgoing M&S director, who has been appointed a director, in our view, adds credibility to the business but might not fit in with the unique culture.”