Online fashion retailer ASOS has recorded £605.7 million in sales in the four months to December 31, a 36 per cent increase on its quarter one result last year.
US sales were the fastest growing business area, growing 66 per cent year-on-year to £82.7 million, followed by international sales, which grew 52 per cent to £361.7 million.
Sales in the brand’s most established UK home market increased by 18 per cent to £244 million, underpinned by promotional activity over the holiday period.
“Following record sales over Cyber weekend and the Christmas trading period, I’m pleased to report a strong start to the year. A 50 per cent plus increase in international sales is a standout performance,” said ASOS group CEO Nick Beighton.
The online retailer also reported a 30 basis point decrease in its gross margin, a 25 per cent increase in active customers (defined as having shopped in the last twelve months), two per cent growth in average basket size and a six per cent increase in average order frequency.
In light of the strong results, the company have upgraded their sales guidance for FY17 to + 25-30 per cent, reflected by projected capital expenditure in the £150-170m range.
“Sales for the year are expected to be up … we’re accelerating our infrastructure investment to handle that growth. ASOS remains well set to meet its longer-term ambitions as a result of the hard work and commitment of the team,” Beighton said.
Commenting on the results, Verdict Retail analyst Sarah Johns said that ASOS’ performance was driven by strong promotional activity during the holiday period last year.
“Q1 2016/17 was an especially promotion-abundant period for ASOS, with blanket discounts of 20 per cent for Halloween and ASOS’s five-day Black Friday period, as well as 30 per cent off selected categories in the run up to Christmas.
“ASOS is continually future-proofing the business, ensuring it can cope with increased demand as it expands globally.
“The strong growth in international sales, particularly in the US as a result of the weak pound, means ASOS will have to keep up with order fulfilment as the retailer expands. This will be imperative as rival retailer boohoo.com seizes market share.
“The decision from CEO Nick Beighton in January 2017 not to raise prices should help ASOS stay competitive in a busier-than-ever online fashion pure play market,” Johns said.
ASOS have been trading in Australia with a dedicated website since 2010, Inside Retail recently spoke with ANZ general manager Carly Cazzolli about their Australian plans.
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