Asos sales and profits expected to beat expectations

Online fashion retailer Asos said sales and profit for its full year are expected to be significantly ahead of market expectations as it delivered a strong operational performance and year-on-year improvements in profitability.

Asos has a warehouse in Barnsley.

Revenue growth is expected to be between 17 per cent and 19 per cent with pre-tax profit in the region of £130m-£150m.

The firm, which has a warehouse in Barnsley, says the improvement in expectations is supported by stronger than anticipated underlying demand and the continuation of its beneficial returns profile.

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In a statement, Asos said: "We had expected to see underlying returns normalise once lockdown measures eased and customers were both able to ship returns and felt more comfortable doing so.

"However, in recent weeks, we have gained better visibility on this pattern in customer behaviour as we have progressed through the returns cycle and it has become evident that returns are not increasing at the rate we originally anticipated.

"As a result, we have seen a significant and sustained reduction in returns rates since April. In part this reflects customer demand for 'lockdown' categories, such as activewear and face and body.

"However, rates have been further suppressed below estimated levels by a prolonged shift in customer behaviour towards more deliberate purchasing across all product categories, even when sales momentum has improved."

The consumer and economic outlook remains uncertain and it is unclear how long the current favourable shopping behaviour will persist, the fashion retailer added.