ASOS has posted a 27% increase in interim group revenues to £1.16bn in the six months to 28 February 2018 and has upped its guidance on capital expenditure for this financial year as it “lays the foundation” to achieve £4bn in sales.
The global fashion destination for fashion-loving twenty-somethings achieved total retail sales of £1.13bn during the period, with UK retail sales up 22% to £414.5m and international retail sales up 31% at £716.8m. Retail gross profit margin was up 100bps to 48% while pre-tax profit was up 10% to £29.9m.
For the first time its half-year site visit figure exceeded 1bn and the business processed 29.9m orders. Its active customer base increased by 28% year-on-year (as at 28 February ASOS had 16.m active customers of which 5.5m were located in the UK and 11m in international territories).
As anticipated the business increased its guidance on capex for financial year 2018 and said it would now be investing between £230m and £250m, primarily on logistics and distribution, to support its rapid expansion and to enhance its service offer. Recently it has added services such as try before you buy and same day deliveries in London, Leeds and Manchester.
Chief executive Nick Beighton said of the results: “These results show strong trading at the same time as we are making substantial investment in our future. Our customer engagement is going from strength to strength and we’ve achieved more than a billion site visits for the first time. Alongside our investment in our people and our technology, we are accelerating investment in our distribution and logistics, laying the foundation for £4bn of net sales, a further step in building ASOS into the world’s number one destination for fashion loving 20-somethings.”
During the first half ASOS simplified it own brand offer under the umbrella name of ASOS Design and said that its own label products accounted for 39% of sales in the first half. Its multibrand offer was enhanced with the addition of Tommy Jeans, Morgan and Ivy Park, while other labels were edited out to keep the offer fresh.
Through its own brand and collaborations with third party brands ASOS says that 55-60% of the product available on its sites is exclusive to ASOS customers, which it said was an important point of differentiation from its competitors. It recently enhanced its own-brand offer with the addition of its own beauty label and an activewear brand called 4505 and speculation is mounting that it will next choose to add homewares to its own label offer.