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International sales drive Asos profit

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Fashion e-tailer Asos has today reported a pre-tax profit increase of 42 per cent to £13.2 million for the five months ending August 31st 2012, buoyed by strong international sales.

Revenue jumped 32 per cent to £238 million while total retail sales grew 32 per cent to £231.2 million over the period.

International sales rose 46 per cent and accounted for 65 per cent of total retail sales over the period as UK growth proved “encouraging”, up 13 per cent on the same period last year.

UK sales reached £81.7 million though the e-tailer’s British customer base remains lower than elsewhere; Asos now has 18.8 million unique customers per month and five million active users.

Free shipping continues to be a draw for the e-tailer’s twenty-something target market while a restructuring of its pricing architecture has also encouraged spend.

Asos reported a six per cent decline in average basket value to £59.64, thanks primarily to a five per cent fall in average selling price, though it also noted a 55 per cent increase in distribution costs over the period.

Nick Roberston, Asos CEO, explained that the company has moved its year-end date and that as such its strong performance is to be applauded.

He added: “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.

“At the same time we have reached the milestone of 5 million active customers worldwide. We’ve also made a number of high calibre appointments recently.

“These appointments will underpin the continued development of the business, both in the UK and internationally.

“We remain positive in our outlook for 2012/13 as we continue our journey to becoming the number one online fashion destination for twenty-somethings, globally.”

Earlier this week, it was reported that pure play e-tailer Amazon is eyeing the fashion site, considering a bid as it focuses its sights on the flourishing online fashion market.

Matt Piner, Lead Consultant at analyst firm Conlumino, believes that Asos is in a firm position financially.

“With margin and profit also growing, these are a well rounded set of results and it is no surprise that Asos has recently been rumoured as a potential takeover target for Amazon,” he said.

“Asos’ ongoing success shows that it is striking a chord with consumers, not just in the UK, but all over the world. In a competitive, albeit fast growing, market Asos has ensured it is positioned to benefit by focusing on the universal principles of what shoppers want and then delivering that, and some.

“Indeed, despite impressive growth in the UK, it is globally where the real opportunities continue to lie. International sales mix is up from 59 per cent in 2011 to 65 per cent in 2012 and Asos is emphatically demonstrating how its offer can be rolled out to other continents.

“The retailer’s offer is built on a functional and effective website, a strong mix of brands, flexibility in delivery options and an increasingly strong reputation as the online destination for fashion shopping.

“As the business continues to grow, new challenges will arise, but Asos remains well placed to meet them.”

Published on Thursday 25 October by Editorial Assistant

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