Asos is predicting its full-year figures will be “significantly” ahead of its expectations after locked down customers bought more online – and sent fewer products back.
The fast fashion retailer expects that revenues in the year to August 31 will be between 17% and 19% ahead of the previous year, while pre-tax profits will come in at between £130m and £150m. That’s up from £33.1m a year earlier, although the 2019 figure came after "substantial transition and restructuring costs".
“The improvement in expectations,” it says in today’s pre-close trading update, “is supported by stronger than anticipated underlying demand and the continuation of the beneficial returns profile highlighted in our last trading statement."
Asos, a Leading retailer in RXUK Top500 research, says it had expected to see returns rise once customers felt more comfortable shipping their parcels back. But that has not happened to the degree that Asos had expected. Partly, it says, that was because customer demand in lockdown was for categories including activewear and beauty products. But it also seems to have been because customers bought – and continue to buy – more deliberately.
In June 2020, its websites – which sell a range of 85,000 products in 10 languages to more than 200 markets around the world, and dispatch from fulfilment centres in the UK, US and Germany – saw 235.7m visits – up from 197.4m a year earlier. It also had 23m active customers – up from 19.9m last June – of whom 7m were in the UK and 16m in other markets (2019: 6.3m UK, 13.6m internationally).
Looking ahead, the retailer says the economic outlook remains uncertain and it does not know whether current “favourable shopping behaviour” will last or whether shoppers will return to normal.
“The second half,” says Asos, “has been a period of tremendous change for Asos, we have made real progress and shown resilience through the period and are exiting the year in a strong position. We have a robust product offer and global infrastructure to leverage. Against this backdrop we have increased confidence that Asos will continue to progress as one of the few truly global leaders in fashion retail.”