Retailer Results / ASOS



Full Year Results
Final results for the year to 31 August 2016

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Trading Update
Four months ended 30 June 2016


• Retail sales up 30 per cent (CCY: +26 per cent)
• International retail sales 59 per cent of total, in line with last year
• Retail gross margin down c.180bps on prior year due to sale phasing and planned price investment
• 12 million active customers at 30 June 2016 (+24 per cent year on year)
• Strong balance sheet position
• ceased trading on 5 May 2016; operating losses and closure costs in line with guidance


1- All numbers subject to rounding
2- On constant exchange rate basis
3- Includes retail sales, delivery receipts and third party revenues

Nick Beighton, CEO, commented: "I am pleased to report strong retail sales growth of 30 per cent (+26 per cent on constant currency basis) over the four months to 30 June 2016, underpinned by our continued price and proposition investments. UK growth remains strong at +28 per cent and we have seen further acceleration across the US, EU and ROW segments; overall International retail sales increased by 31 per cent (25 per cent on constant currency basis).

"As anticipated, our retail gross margin for the period is down c.180bps, approximately 40 per cent of which (c.70bps) is due to moving our main sale forward one week into this financial period, with the balance as a result of continued price investment.

"We now anticipate full year sales growth at the upper end of the 20-25 per cent range. Our retail gross margin guidance of up to 50bps of investment remains unchanged and we remain confident in delivering current market PBT expectations for the year.

"Given the increased momentum within the business combined with our strong financial position, we will maintain our successful programme of reinvestment to take advantage of the opportunities currently available to us."



Trading Update
Six months ended 29 February 2016


• Strong performance in strategic markets: UK +25 per cent, EU +31 per cent, US +34 per cent (in constant currency)
• 10.9 million active customers, up 17 per cent on prior year
• Retail gross margin up 40bps; gross margin up 50bps
• Profit before tax of £21.2m (H1 2015: £18.0m)
• Robust cash position of £135.9m (31 August 2015: £119.2m)
• Technology and logistics plans on track and pace of change stepping up


These are very strong results from ASOS who continue to make strong gains in the UK and key strategic markets. The Group delivered strong retail sales growth of 21 per cent to £648.6m (H1 2015: £536.4m) during the six months ended 29 February 2016. Profit before tax increased by 18 per cent to £21.2m (H1 2015: £18.0m, inclusive of final business interruption insurance reimbursements of £6.3m).

Investment in prices seems to have been more than offset by stronger demand for full price sales with retail gross margin up 40bps, year-on-year. Further investment in delivery options and marketing has been funded through leveraging warehouse costs. Similarly, investments in targeted zonal pricing in strategic markets has improved competitiveness with EU sales up +31 per cent and the US +34 per cent.

ASOS has decided to pull out of China with £2.7m losses incurred in the first six months and anticipates a further loss of £1m before ceasing trading.
The Board remains confident of delivering in line with market expectations for the financial year. Growth of c.20 per cent is expected in the second half of the financial year, an investment of up to 50bps in retail gross margin and a Group EBIT margin of c.4.0 per cent for the full year.

Nick Beighton, CEO, commented: "We’ve had a good start to the year and I’m pleased with progress on a number of fronts. These results demonstrate improving momentum in the business with group sales up 21 per cent (25 per cent in constant currency). Our UK sales remain strong, up 25 per cent, and our international customers have responded well to our continuing price investments with sales up 18 per cent (24 per cent in constant currency).

"Particularly encouraging is the 17 per cent growth in our active customers to 10.9m, with benefits from our investment in our technology and logistics delivering 21 per cent growth in visits to our sites and growth in average order frequency, basket value and conversion.

"We delivered profit before tax of £21.2m, growth of 18 per cent, in line with our expectations. I’m pleased to confirm that we are on track to achieve our previously stated sales and margin guidance for the full year."



Trading Update
Four months to 31 December 2015


• Retail sales up 22 per cent (UK retail sales +25 per cent, International retail sales +20 per cent)
• International retail sales 54 per cent of total (55 per cent last year)
• Retail gross margin down c.40bps
• 10.7 million active customers (shopped in last 12 months) at 31 December 2015 (+18 per cent year on year)
• Strong balance sheet and cash position


Sales growth over the period was strong with UK sales up +25 per cent in the four months to 31 December. Meanwhile, International retail sales grew by 20 per cent during the same period and now account for 54 per cent of total sales. Sales within Europe also performed well, up by 29 per cent over the same period.

The company reportedly had a successful Black Friday weekend and recorded record sales. Further growth has been achieved with average order frequency, average basket values and number of orders.

Nick Beighton, CEO, commented: "We have traded well through peak and are continuing to invest in the future growth of the business. We are on track with our plans for the year as a whole.

“Retail sales for the four months to 31 December 2015 grew by 22 per cent (+27 per cent on a constant currency basis) in line with expectations. We had record sales over cyber weekend in late November and have seen further growth in average order frequency, average basket value and number of orders, alongside an acceleration in active customer growth to +18 per cent.

“UK growth remained strong at +25 per cent and our improved international sales growth of 20 per cent (+28 per cent on a constant currency basis) was underpinned by our continued price investments, further deployment of our zonal pricing tool and continued strong full price sales mix. As a result the retail gross margin declined by a net 40bps.

“We are progressing well with our warehouse and technology investments and in December construction began on our EuroHub 2 facility."

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