The online fashion retailer Asos has staged a comeback after a difficult year in which it issued two profit warnings. It credited a record Black Friday for strong sales growth over the festive period.
The firm said overall sales grew 20% to £1.1bn in the four months to 31 December, up from the 13% growth recorded in the year to 31 August. The increase beat the 15% forecast by City analysts and the shares were up 8% at £32.70 on Thursday morning. Six months ago they were changing hands at £21 after falling from a 2018 peak of £76.
In the UK, sales climbed 18% over the four-month period, compared with increases of 21% in the rest of the EU and 23% in the US and rest of the world.
This performance contrasts with its fortunes a year ago, when Asos admitted it had got Black Friday wrong and underestimated rivals’ price cuts, forcing it to issue a profit warning. Another profit warning followed in July, which the retailer blamed on IT chaos in its overseas warehouses.
This time, Asos’s chief executive, Nick Beighton, lauded a record Black Friday. “The actions we took to rebuild customer momentum during the peak trading period delivered a better than expected sales performance largely driven by the Black Friday weekend.” He said the retailer had improved product choice, stock availability, presentation and social media engagement.
The investment hit gross profit margins, which fell 170 basis points. Asos said its outlook for this year was unchanged.
Richard Lim, who runs the retail consultancy Retail Economics, said: “These figures show that the retailer is back on track. They effectively leveraged their vast reach on social media to gain strong traction heading into Black Friday and the Christmas period. Past investments in digital and logistics infrastructure improved their range and availability, showing early signs that it’s beginning to pay off.
“It abundantly clear that Black Friday has become critical in retailers’ success over the festive period. Savvy shoppers are bringing forward their purchases to take advantage of discounts for their Christmas shopping.”