Online fashion retailer Asos expects to beat full-year profit expectations after customer numbers grew to more than seven million, helping sales to surge.
The trendy brand – aimed at twenty-something fashionistas aiming to re-create popular celebrity looks – saw sales rise 47 per cent to £208 million in the three months to August.
The final-quarter numbers beat City expectations and took full-year sales to £754m, up 40 per cent year-on-year.
Shares in Asos, which were already valuing the company at around 100 times its full-year earnings, jumped by 13 per cent or 636p to 5,469p. The retailer’s explosive growth had already made it the largest company by far on London’s junior Aim stock exchange.
Retail analyst Nick Bubb described Asos’s figures as a “blowout performance”, especially the 49 per cent jump in UK sales.
He added: “The UK operation has been surprising on the upside in recent quarters, but it has surprised again by taking full advantage of having summer ranges in stock in July and August, and 49 per cent UK sales growth is pretty staggering.”
He said that the 47 per cent growth across the group’s international division was also good, almost matching its third-quarter performance, while gross margins were also up.
“Perhaps the only surprise is Asos has flagged only a ‘small’ beat to full-year profit expectations, but maybe management are being conservative,” he said.
The number of active customers on its website grew to 7.1 million customers, up from five million at the same time last year.
Chief executive Nick Robertson said it was “strong finish to the financial year”.
“We expect profit before tax for the year to be marginally above expectations,” he added.
The buoyant performance increases the likelihood of top managers at the firm, including Robertson, sharing in a lucrative bonus pot of up to £30m, which is dependent on them meeting a set of tough sales targets by 2015, the year in which it hopes to pass the £1 billion revenue mark.
Analyst Freddie George, at Cantor Fitzgerald, maintained a “hold” recommendation on Asos despite upping his price target. He is now forecasting pre-tax profits of £53m for the financial year just finished.
He said: “We continue to believe the company will not disappoint on its earnings and will achieve its longer-term target of £1bn of sales by 2015.
“Although there may be some disappointment that there is not more of an upgrade after these figures, the implication is that the better than expected gross margin increase was offset by higher costs.”
But Numis Securities published a “buy” note with a 6,000p target for the shares.
It said: “We continue to believe that Asos is a unique global proposition, a profitable fast fashion online pureplay, investing in driving exceptional growth, and squarely targeting the twenty-something fashion market.”
Earlier this year, the retailer announced a tie-up with Primark, allowing the budget fashion chain to sell clothes on the internet for the first time.