Online apparel retailer Asos has seen second quarter sales continue to rise, driven by international growth as the UK business slowly reaches maturity.
The company said that retail sales increased 37% over the quarter ending February 28 to reach GBP186.5 million ($282.3 million), from GBP135.8 million in the same period of the prior year.
In the UK, sales increased 28% to GBP75.5 million, while US sales were up 50% to GBP16.5 million, European sales grew 58% to GBP44.1 million and rest of world sales increased 33% to GBP50.3 million. Total international sales were up 45% to GBP110.9 million.
Over the half, UK sales grew 26% to GBP137.6 million, while international sales were up 39%, rising 34% on a consolidated basis to GBP352.3 million.
“Our UK performance remained ahead of expectations at +28%, with particularly strong trading during the peak December period. Our International business grew by +45% and now accounts for 59% of our total retail sales. Our EU growth continues to be driven by strong performance in those countries where we have dedicated websites and particularly by our new in-country teams in France and Germany,” said CEO Nick Robertson.
“The strength of our UK performance continues to put pressure on our achieved retail gross margin. We expect this to improve during the remainder of the financial year as we annualize last year’s price investments and achieve planned sourcing gains.”
Commenting on the results, Conlumino analyst Anusha Couttigane said: “This stellar set of results is no less than expected from the UK’s leading online fashion destination. Whilst the gradual deceleration of UK sales has tempered profit margins somewhat, this is to be expected from a retailer which, after a decade of trade, is slowly reaching maturity here. However, ASOS’ overseas activity continues to run with the baton, with international retail sales at £111 million for the quarter.
“In the UK, free delivery and returns, with frequent next day delivery deals, has enabled the fashion retailer to build a loyal customer base with trendy twenty-somethings. This is the e-tailing generation for whom maximum convenience is the key to achieving immediate shopping satisfaction. With worldwide free delivery, these fulfillment capabilities are gradually being rolled out across the globe and further internationalization will see ASOS add Russian and Chinese language websites to its already ten-strong multi-site business. Expanding into these markets represents a key opportunity to boost total sales growth to the levels previously witnessed circa. 2007-2009.”
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