Asos says FY profit to be at top end of market expectations

Asos said revenue growth in the period exceeded its expectations, "driven by investment in product, pricing and marketing and stronger than anticipated consumer demand for our products".

The company was also helped by lower returns rates, driven by renewed social restrictions in the period. Asos said that with restrictions likely to remain in place for the balance of the first half, it expects a net Covid benefit on pre-tax profit of "at least" £40m in the first half.

"Whilst our outlook for the balance of the year remains unchanged, given the ongoing virus and the likely economic impact on our core 20-something consumer, the strength of our performance in P1 with the anticipated H1 Covid profit before tax benefit, means we now expect FY21 profit before tax to be at the top end of current market expectations," the company said.

Consensus expectations are for between £115m and £170m.

During the four-month period, total group revenue rose 23% to £1.36bn, with UK retail sales 36% higher at £554.1m. EU retail sales were up 18% to £390.7m and sales in the US were 13% higher at £156.8m.

Asos said the "exceptional" UK growth reflected "strength of market position as well as restrictions on non-essential retail stores through the peak period".

Chief executive officer Nick Beighton said: "Looking forward, given the uncertainty associated with the virus and the impact on customers' lives, our cautious outlook for the second half of the year remains unchanged.

"However, the strength of our performance gives us confidence in our continued progress towards capturing the global opportunity ahead."

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "The pandemic may have wreaked devastation on retailers with a large brick and mortar footprint, but it’s given Asos, with its highly flexible e-commerce platform, another big shot of success."