Asos posts surge in FY profits but cautious on outlook

(Sharecast News) - Asos reported a surge in full-year profit on Wednesday as it picked up more than 3m new customers, but the online fashion retailer struck a cautious note over how pressure on the disposable income of its 20-something customers might impact the business.
In the year to the end of August, pre-tax profit jumped 329% to £142.1m, with revenue up 19% at £3.3bn. Retail sales in the UK rose 18% to £1.2bn, while international retail sales increased 19% to £2bn.

The company's active customer base grew by 3.1m to 23.4m, "demonstrating momentum in customer acquisition and high levels of engagement".

Asos said that while demand for certain types of product, particularly occasion and formalwear, remained constrained, it saw strong growth in casualwear and other lockdown relevant products.

"We have demonstrated and enhanced our operational flexibility this year, and are emerging a stronger, more resilient and agile business.

"However, whilst we are well positioned for peak trading and the year ahead, we are cautious on the outlook for consumer demand, and will remain so until lifestyles and financial stability for our 20-something customers start to normalise. Timelines for containment of the virus and a vaccine still look uncertain and a number of our major territories are facing into the prospect of a second wave of cases and increasing lockdown measures."

"It is clear that a normal pattern of social events is not going to resume in the short term so whilst we have confidence in our ability to continue growing our market share globally, we are cognisant of the economic impact this crisis is having on our 20-something customers and the pressure on their disposable incomes."

At 1325 BST, the shares were down 10% at 4,831p.