ASOS sales lifted by same-day deliveries, try before you buy

Total sales at ASOS rose 30% in the four months to the end of December, as same-day delivery and the online fashion retailer’s ‘try before you buy’ offers bore fruit.

Sales jumped to £790.4m from £605.7m in the same period a year ago, with UK retail sales up 23% to £300.9m. In the US, sales rose 24% to £102.4m, while EU and Rest of World sales increased 42% and 34% to £235.2m and £151.9m, respectively.

Active customer numbers were up 19% in the period, while the average basket value edged up 3% and average order frequency rose 8%. Meanwhile, total orders placed came in at 20.2m, up 30% year-on-year.

There was no change to FY18 financial guidance but the company said full-year capex is now expected to come in at the upper end of the £200m to £220m range.

Chief executive officer Nick Beighton said: “I'm pleased to report a strong performance during the period including peak. We achieved an exceptional performance in the UK, whilst momentum in international sales continued. We acquired 2.6 million active customers year on year and saw encouraging movements across all key customer KPIs.

“Velocity in our technology programmes continued, with a record number of releases. Our customer proposition was further enhanced in the UK with the launch of Try Before You Buy and ASOS Instant, our same day delivery proposition.

“Following this strong start to the year, we remain confident in our full year guidance and delivery of our planned investments in infrastructure to support our global ambitions."

Hargreaves Lansdown analyst Laith Khalaf said ASOS is enjoying the kind of sales growth that traditional retailers would give their eye teeth for.

“While clothing sales at M&S went backwards over the festive period, and Next was applauded by the market for eeking out 1.5% growth, ASOS is making retail look easy by turning over almost a third more sales than last year. The online fashion retailer has proved very successful at attracting new customers, while at the same time increasing the amount existing customers are spending.

“ASOS earns its crust from millennials, and has over 80 content producers tasked with showcasing its wares on social media, because it knows this is a key battleground for the attention of its young target audience. After all, the average millennial actively uses four social media networks and spends three hours a day online on their phones. Despite the name drawing little more than a puzzled shrug from most people over the age of 40, ASOS is now bigger in terms of its market capitalisation than Marks & Spencer.

“ASOS isn’t shackled with a dividend payment either, because shareholders are happy for it to reinvest for further growth, such are the global opportunities in front of the company. However, with a share price trading around 70 times earnings, ASOS needs to keep growing fast to keep up with market expectations.”

At 0930 GMT, the shares were up 0.9% to 6,936p.