ASOS upgrades sales and profit outlook on strong demand

British online fashion retailer ASOS on Wednesday forecast full year sales and profit significantly ahead of market expectations, saying it was benefiting from stronger than anticipated underlying demand. It said revenue growth for its 2019-20 year was now expected to be between 17% and 19% with pretax profit in the region of 130 million pounds to 150 million pounds ($170-$196 million).

British online fashion retailer ASOS on Wednesday forecast full year sales and profit significantly ahead of market expectations, saying it was benefiting from stronger than anticipated underlying demand.

It said revenue growth for its 2019-20 year was now expected to be between 17% and 19% with pretax profit in the region of 130 million pounds to 150 million pounds ($170-$196 million). ASOS made a pretax profit of 33.1 million in 2018-19.

Several British clothing retailers, including Next and Superdry, have recently reported better than expected trading as Britain emerged from coronavirus lockdown. ASOS, whose fast fashions are particularly popular with shoppers in their twenties, said it had also benefitted from less clothing products being returned.

That reflected robust demand for "lockdown" categories, such as activewear, and a prolonged shift in customer behaviour towards more deliberate purchasing. "Looking forward, the consumer and economic outlook remains uncertain and it is unclear how long the current favourable shopping behaviour will persist," ASOS said.

Shares in ASOS, up 25% so far this year, closed Tuesday at 4,220 pence, valuing the business at 4.2 billion pounds. ($1 = 0.7668 pounds)

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