Asos Surges Most in a Year as Quarterly Sales Exceed Estimates

Asos Magazine July | Source: Asos

LONDON, United Kingdom — Asos Plc, the U.K.’s largest online-only fashion retailer, will report forecast-beating full- year earnings as a surging customer base boosts sales growth.

Pretax profit for the year ended Aug. 31 will be “marginally” above analyst estimates, London-based Asos said in a statement today. The shares jumped as much as 11 percent, the most in a year, and have almost doubled in value in 2013.

Asos is benefiting from higher demand for online fashions both at home and abroad. Retail sales advanced 47 percent in the fourth quarter, beating estimates, while the number of active customers rose 42 percent from a year earlier to 7.1 million.

“Asos is set for a number of years of rapid growth as a world leading online retailer,” Richard Edwards, an analyst at Citigroup Inc., said in a note today. The company “combines a leading fast-fashion concept, a best-in-class online customer fulfilment proposition, in-house content creation and digital monitoring platform on an increasingly global basis.”

The shares rose as much as 522 pence, or 11 percent, to 5,355 pence in London and were up 9.5 percent at 5,294 pence as of 8:30 a.m. The gain almost erased a decline in the stock over the previous two days after Morgan Stanley lowered its recommendation on Asos to underweight.

The 47 percent growth in fourth-quarter retail sales to 207.9 million pounds ($335 million) beat the median estimate of 13 analysts compiled by Bloomberg for a 43 percent increase.

International sales accounted for 64 percent of group revenue in the quarter, down from 65 percent a year earlier as the online retailer’s U.K. retail sales rose 49 percent.

Asos, which sells more than 60,000 branded and own label products to 241 markets, added a local language website in Russia in May and plans to start a Chinese version later this year. The company is due to report full-year earnings Oct. 23.

By Katarina Gustafsson; Editors: Celeste Perri, Paul Jarvis, Tim Farrand