Online fashion retailer Asos.com has today reported a 49 per cent rise in total retail sales for its full-year period, however trading growth slowed significantly in the UK during the final quarter.
In the last three months of the year ending March 31st 2012 the e-tailer‘s UK sales increased four per cent year-on-year, down from a rise of ten per cent during Q3.
Over the full-year UK sales were up seven per cent on the previous 12 month and totalled an impressive £197.9 million, but this rise was well down on the previous year when domestic trading rose 25 per cent.
While its UK operation is maturing, the hugely successful young company is still making enormous gains overseas, particularly outside of Europe & the US where sales increased 185 per cent over the full-year.
Nick Robertson, CEO of Asos, commented: “I am pleased to report a strong fourth quarter performance for both our UK and International businesses, particularly as we annualised against the introduction of Global Free Shipping last year.
“We ended the quarter with International sales representing 62 per cent of the total up from 51 per cent last year.
“Profit before tax (PBT) and exceptional items for the full year to 31 March 2012 is expected to be in line with expectations. We remain committed to our global expansion plans and approach the new financial year with confidence.”
Total international sales grew 103 per cent over the 12 months and represented 59 per cent of all trading with new websites being launched for the Italian, Spanish and Australian markets.
Asos claims its retail gross margin during the final quarter was significantly ahead year-on-year, and across the 12 month period the business managed to improve efficiency and conducted a warehouse transition.
Analysts for Investec Bank David Jeary & Bethany Hocking expect Asos to meet its PBT target of £40 million but say that is shares are likely to drop today due to international sales for the fourth quarter coming in slightly below consensus expectations.
Neil Saunders, Managing Director of retail analyst group Conlumino, believes that its international business still has plenty of expansion opportunities but argues that things will only become tougher for the retailer in the UK.
“A slowdown was always inevitable as ASOS matured and reached critical mass and we believe that this level will represent a more typical growth rate going forward,” Saunders said.
“However, such growth remains a long way below total UK online fashion sales growth indicating that ASOS is losing share. Part of the reason behind this is the intensification of competition in the online fashion with both physical retailers upping internet standards and players like eBay launching their own propositions.
“Against this backdrop ASOS will need to work harder on the marketing front and ensure it remains sufficiently differentiated in terms of products and collections.”
