Bumper Christmas boosts sales

Online fashion retailer ASOS said retail sales rose 41 per cent in December, helped by a strong showing in the UK over Christmas.

ASOS, whose celebrity fans include American First Lady Michelle Obama, said December retail sales came in at £78.1m, with the more established UK operation up a better-than-expected 34 per cent. International sales rose 47 per cent.

While traditional high street stores are suffering as consumers worry about jobs and squeezed household incomes, online retailers are faring better.

Hide Ad
Hide Ad

ASOS, which targets young women looking to emulate the designer looks of celebrities like Nicole Scherzinger and Fearne Cotton, posted international sales of £42.4m and UK sales of £35.7m.

Panmure Gordon analysts said: “This is extremely impressive given the fact that the UK online clothing market, though still growing strongly, is one of the most mature in the world.”

International sales represented 54 per cent of the total in December, a lower proportion than the 63 per cent reported in the first quarter because of the traditional Christmas uplift in UK sales.

Chief executive Nick Robertson said: “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.”

Hide Ad
Hide Ad

Analyst David Reynolds at Jefferies said it was a “cracking set” of revenue numbers, with the rise in total sales sitting well with an analyst consensus for a 32.1 per cent rise in its financial year to the end of August 2013.

But he said the contraction in the group’s retail gross margin, down 29 basis points year-on-year, was something to keep an eye on, and with the stock trading at 36 times 2014 forecast earnings, there would be a better time to buy the shares. “Clearly trading through calendar 2013 will be key,” he said. “Can ASOS maintain the stunning performance in the UK, and is gross margin compression going to be a recurring feature as UK growth pushes on?”

Related topics: