LONDON, United Kingdom — British online fashion retailer Asos forecast full-year sales and profit significantly ahead of market expectations, saying it was benefiting from stronger than anticipated underlying demand and fewer products being returned by shoppers.
Shares in Asos were up 8.5 percent at 07.34 am GMT on Wednesday, extending gains in 2020 to 36 percent after it said revenue growth for its 2019-20 year was now expected to be between 17 percent and 19 percent.
It forecast pretax profit in the region of £130 million to £150 million ($170-$196 million), up from £33.1 million in 2018-19.
Several British clothing retailers, including Next and Superdry, have recently reported better than expected trading as Britain emerged from the coronavirus lockdown.
Asos, whose fast fashions are popular with shoppers in their twenties, said it had expected to see return levels normalise once lockdown measures eased and customers were able to ship returns and felt more comfortable doing so.
However, it said returns were not increasing at the rate it had anticipated due to strong demand during the lockdown for activewear and a shift to more intentional purchasing across all ranges.
"Looking forward, the consumer and economic outlook remains uncertain and it is unclear how long the current favourable shopping behaviour will persist," Asos said.
Last month Asos said it would repay the money it claimed under Britain's scheme to furlough workers during the crisis.
In April it raised £247 million in new equity to shore up its finances.
By James Davey; editor: Kate Holton and Sarah Young