Britain's Asos raises profit view after strong Christmas sales

[LONDON] British online fashion retailer Asos on Wednesday forecast a full-year profit at the top end of market forecasts after Christmas trading surpassed its expectations helped by strong demand during Covid-19 pandemic lockdowns.

Analysts have forecast a pretax profit of £115 million to £170 million (S$208.1 million to S$307.7 million) versus £142.1 million in 2019-20.

Asos, which sells fashion aimed at 20-somethings, said group retail sales rose 23 per cent over the four months to Dec 31 year on year.

The group has traded through coronavirus lockdowns while store-based rivals have had to close shops for months.

It also benefitted from fewer products being returned by shoppers during the crisis, as well as investment in product, pricing and marketing, it said.

Its active customer base increased by 1.1 million to 24.5 million, ASOS said.

However, its gross margin fell 90 basis points, partly reflecting changes to its product mix and increased freight costs.

The group said it would incur Brexit tariff costs of about £15 million in 2020-21 associated with country of origin rules.

Asos shares, up 57 per cent over the last year, closed Tuesday at 5,196 pence, valuing the business at £5.1 billion.

REUTERS