Asos remains “cautious” despite revenue reaching £1bn

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Asos trading update Nick Beighton
EU revenues rose by 22% to £328 million
// Asos sales increase during lockdown
// EU revenues rise but UK experiences 1% fall in sales
// The retailer said it is on track to deliver “strong profit growth”

Asos has seen its sales rise during the Covid-19 lockdown and is on track to deliver “strong profit growth”.

The online fashion retailer recorded a 10 per cent increase in group revenue to £1 billion for the four months to June 30.

Asos’ international markets had accelerated retail sales as they rose 17 per cent to £654.1 million across the quarter.


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Meanwhile, EU revenues rose by 22 per cent to £328 million.

That compared to a one per cent dip in sales to £329.2 million in the UK and a three per cent growth in the US, where sales totalled £124.9 million.

Moreover, Asos saw its active customer base grow 16 per cent to 23 million during the quarter, driven by new international shoppers using its platform during global lockdowns.

Asos said it would repay all money previously claimed via the furlough scheme to the UK government as employees return to work.

The group’s full-year profits are expected to come in at the top end of market expectations, but Asos said it remained “cautious on the short to medium term outlook on demand” as “restrictions remain in place”.

“This has been a tough time for all businesses, but we have remained focused on doing the right thing for our people and our customers and making sure that we emerge from the current crisis as a stronger and better organisation,” Asos chief executive Nick Beighton said.

“Our performance in Q3 shows that we are delivering against this aim despite the tough economic and social backdrop. We have learnt a lot and adapted quickly, and Asos finishes the period with improved underlying profitability,” he said.

“While we remain cautious about the consumer impact of Covid-19 looking forward, we are on track to deliver strong year-on-year profit growth and to return to positive free cash flow for the full-year.”

Separately, the retailer has axed contracts with some clothing suppliers after discovering possible serious threats to workers’ health, safety or human rights.

The company’s inspectors found major ethical breaches at almost a quarter of suppliers visited in 16 countries, including seven sites in the UK, according to a 2018 report leaked to The Telegraph.

In the UK, Asos has ditched one supplier in Leicester – the city at the centre of allegations over poor working conditions following criticism of rival Boohoo.

The leaked document dates from May 2018 and summarises concerns about Asos’s supply chain after it inspected sites to check on working conditions as part of an ethics drive. It covers data gathered over the previous 12 months.

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