ASOS revises full year forecast for sales and profit
Online fashion retailer ASOS has reduced its expectations for its full financial year after trading in November was “significantly behind” expectations.
In the three months to 30 November revenue increased 14% to £656 million as retail sales climbed by 13% to £640 million. This first quarter saw UK sales rise by 19% to £237.1 million, although the latter was achieved at the cost of more promotional activity than initially planned.
Sales in Europe were up 18% to £203.8 million but ASOS said trading conditions across Germany and France, which account for around 60% of its EU sales, have become more challenging. Sales climbed by 13% in the US.
ASOS said trading in September and October was broadly in line with expectations but was significantly behind in November due to a weakening in consumer confidence. The retailer has been increasing its promotions which has led to higher discounting and a continued high clearance mix. ASOS said the rise in discounting combined with the period’s unseasonably warm weather has reduced its average selling price which has not been compensated by higher units per basket. Consequently, its average basket value is now lower year-on-year.
As a result of the figures, ASOS has now revised it guidance for the full year to August and said it expects sales growth of around 15% compared to a previously guided 20 to 25%. It has also revised its EBIT margin from 4% to 2%.
Nick Beighton, ASOS chief executive, said: “We achieved 14% sales growth in a difficult market, but in the light of a significant downturn in November, we think it’s prudent to recalibrate our expectations for the full year. We are taking all appropriate actions and our ambitions for ASOS have not changed.”
