INVESTORS are in line for a double dose of good news from the fashion sector this week with solid full-year numbers expected from high street stalwart Debenhams and online darling Asos.
Debenhams is thought to have benefited from a store modernisation programme, its Life Made Fabulous television advertising campaign and overseas expansion, which has included a recent push into Russia.
The group ended its year on a high, reporting a 3.7 per cent hike in like-for-like sales excluding VAT in the ten weeks to 1 September. Online sales were particularly strong, up 40 per cent, and it grew its share of the under-pressure womenswear market.
Matthew Taylor, an analyst at Numis Securities, believes Thursday’s results will reveal an annual pre-tax profit of £158 million, largely in line with the year before as tighter profit margins offset the jump in sales.
The chain, which has 164 stores in the UK and Ireland as well as a string of franchised outlets in almost 30 countries, has seen its shares rise more than 80 per cent in the past year as it rolls out its turnaround plan.
This has included focusing on its exclusive Designers at Debenhams ranges, with collections by Henry Holland, John Rocha and recent addition Marios Schwab.
Kate Calvert, retail research analyst at Seymour Pierce, said: “Management has done a good job of steering the business through the prolonged downturn.”
Thursday should also see Asos report strong full-year earnings following its recent coup in appointing two high-profile names to its board.
The group confirmed this month that former M&S director Kate Bostock – described as one of the most influential women in British fashion – will join as executive director for product and trading from January. The news came just a week after it named Scots-born e-commerce veteran and former Amazon UK boss Brian McBride as its new chairman.
The appointments highlight the success of Asos and how seriously it is now taken in the City and fashion world.
Since launching in 2000, it has notched up more than five million active customers and annual sales of around £500m.
Thursday’s figures are expected to confirm that Asos – which stands for As Seen On Screen – has held its own in a fiercely competitive market.
Numis Securities’ Taylor is expecting the firm to report a 39 per cent leap in pre-tax profits to £44m for the year to August, although the results will be pro forma as the group recently changed its year-end from March.
He said it will mark a “further chapter in Asos’s remarkable story”.
Panmure Gordon analyst Jean Roche is expecting a 40 per cent surge in profits to £44.6m.
Sheridan Admans, investment research manager at The Share Centre, said: “We don’t expect Asos to have been isolated from the general slowdown in consumer spending, but think that its full-year results won’t be too disappointing either.”
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