14th Oct 2020 10:27
(Alliance News) - ASOS PLC's annual profit multiplied and its revenue jumped almost 20%, the online retailer said on Wednesday, as it shrugged off "performance issues" from last year.
But despite the boom in earnings, the company kept a lid on expectations for the new year and beyond, owing to economic uncertainty, particularly affecting its target market of young adults.
ASOS shares were 6.2% lower at 5,044.00 pence in London on Wednesday morning, though they remain up 50% since 2020 began.
ASOS said pretax profit in the year that ended August 31 multiplied to GBP142.1 million from GBP33.1 million. About GBP50 million in a "non-strategic" costs were not repeated in the most recent financial year, ASOS noted, as an efficiency drive "exceeded our initial expectations".
Helped by a boost in demand during the Covid-19 lockdown, revenue during the period surged 19% to GBP3.26 billion from GBP2.73 billion.
"After a record first half which saw us make progress in addressing the performance issues of the previous financial year, the second half will always be defined by our response to Covid-19. I am proud of the way ASOS met this challenge head on," Chief Executive Officer Nick Beighton said.
UK retail sales during the year grew 18% to GBP1.18 billion. But like last year, the bulk of ASOS's revenue came from its international arm. International sales climbed 20% to GBP2.00 billion.
ASOS's performance in the prior financial year was hit by warehouse problems in Atlanta in the US and in Berlin in Germany. It also was marked by a pair of profit warnings, the second in July 2019 as a result of the warehouse issues, and the first in December 2018 following weaker November trading that year.
Looking ahead, ASOS said it is "well-set for peak trading" with warehousing operating at normal levels, despite social distancing measures being in place.
The company added it has made a "solid start" to the new year but is tempering expectations for now given the uncertainty caused by Covid-19 and the "economic prospects and lifestyles of 20-somethings" being set for disruption.
Beighton added: "I am pleased by the improvements we have made this year but there is still more for us to do to continue our progress. Whilst life for our 20-something customers is unlikely to return to normal for quite some time, ASOS will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail."
By Eric Cunha; [email protected]
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