(Alliance News) - ASOS PLC on Wednesday reported "steady" sales growth and added that it expects full-year profit at the upper range of market forecasts.
The online-only clothing retailer added that it will repay UK government support received under the furlough scheme, off the back of its performance so far this financial year.
In the four months to June 30, revenue rose 10% to GBP1.01 billion from GBP919.8 million in the year prior. In the ten months to June 30, revenue jumped 17% to GBP2.61 billion from GBP2.23 billion.
The four-month period, internally labelled as P3, was mired in lockdown measures, forcing high street retailers to keep stores closed.
"We have continued to focus on trading dynamically and managing business performance rigorously. This is evident in our P3 performance, which shows a steady improvement in sales growth through the period alongside materially improved levels of profitability and cash generation," ASOS said.
UK retail sales during P3 fell 1.5% annually, though they surged 22% in the EU and 19% in the Rest of the World region. US sales nudged up 2.9%.
"While we remain cautious about the consumer impact of Covid-19 looking forward, we are on track to deliver strong year-on-year profit growth and to return to positive free cash flow for the full-year," Chief Executive Officer Nick Beighton added.
The company expects pretax profit for financial 2020 to be "towards the top end of market expectations".
"As a result of our expectation that we will deliver a better than initially anticipated full-year performance, we are repaying the support we received from the UK government furlough scheme," ASOS said.
Earlier on Wednesday, the Daily Telegraph reported that ASOS dropped a slew of suppliers after unearthing health, safety and human rights threats.
According to the newspaper, a leaked 2018 report stated that ASOS inspectors had found a series of breaches at roughly a quarter of its suppliers, include some sites in the UK.
One supplier in the UK it has ditched is based in Leicester, a city which has been at the heart of allegations involving Boohoo Group PLC and Quiz PLC.
Last week, ASOS temporarily suspended its trading relationship with Boohoo brands after claims that the fast-fashion retailer sold clothes made in factories where staff were paid less than the minimum wage and worked in poor conditions.
A Sunday Times newspaper report alleged that workers in a Leicester factory making clothes destined for Boohoo were being paid as little as GBP3.50 an hour.
And on Monday, Quiz had said it is investigating a Leicester-based supplier which is alleged to have paid staff as little as GBP3 an hour.
Quiz had said it believes that one of its Leicester-based suppliers has used a subcontractor at the centre of allegations over breaches to the UK National Living Wage.
ASOS on Wednesday noted "health and safety measures implemented across our product supply chain" during the lockdown period.
ASOS said it has "focussed" on working collaboratively with suppliers during the Covid-19 pandemic.
The company added: "This, alongside the strength of our long-term supplier relationships, enabled us to navigate the disruption to sourcing that lockdown caused across the globe and we were pleased to be able to take receipt of all ASOS Design product that had been made. This supports our relationships and continuity in our supply chain as we plan together for a less certain profile of demand."
ASOS shares were 3.2% higher at 3,480.00 pence each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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