December 11, 2012 / 7:41 AM / 5 years ago

UPDATE 2-ASOS running at full speed to meet demand

* Q1 total retail sales 165.8 mln stg, up 30 pct

* UK retail sales up 24 pct, overseas up 34 pct

* Retail gross margin down 100 basis points

* CEO positive on Christmas and 2013 outlook

* Shares up 4 pct

By James Davey

LONDON, Dec 11 (Reuters) - British online fashion retailer ASOS said it was operating at close to full capacity to maintain heady rates of sales growth both in its home market and overseas.

Shares in ASOS, whose celebrity fans include United States First Lady Michelle Obama, rose 4 percent on Tuesday after the firm posted first-quarter sales growth slightly ahead of consensus expectations and said it was confident about the outlook for Christmas and 2013.

With Britain facing the prospect of a triple-dip recession, many retailers have been finding the going tough as consumers fret over job security and a squeeze on incomes. ASOS, with its broad international reach, has bucked the gloom.

The retailer, which targets young women looking to emulate the designer looks of celebrities like Nicole Scherzinger, Tulisa Contostavlos and Cheryl Cole, said its retail sales rose 30 percent to 165.8 million pounds ($266.5 million) in the three months to Nov. 30, its fiscal first quarter.

That compares with analysts’ consensus forecasts of about 29 percent and growth of 31 percent in the fourth quarter of the previous financial year, and reflects a 35 percent rise in active customers to 5.4 million from 160 countries buying on-trend products such as onesies, Christmas jumpers and leathers.

“I can’t grow much more than these sorts of levels on the basis that I haven’t got more than 30 percent more stock in the business,” Chief Executive Nick Robertson told Reuters, adding he was keen analysts “don’t run away with” growth forecasts.

ASOS’ first-quarter retail sales in Britain rose 24 percent to 62.1 million pounds, while international sales increased 34 percent to 103.7 million pounds and now represent 63 percent of total sales.

“I can’t sell the same dress twice because it’s all coming out of the same warehouse, so if I‘m doing better in the UK I can’t outperform everywhere else,” said the CEO.

Robertson was particularly encouraged by the performance in Britain.

“This is our mature market and some people had questioned whether or not we were grinding to a halt in the UK. Clearly that’s not the case,” he said.

ASOS’ retail gross margin did, however, fall 100 basis points year-on-year.

That reflected a strong comparative period last year, when gross margin rose 440 basis points, the UK accounting for a larger percentage of total sales than initially planned, and price cuts.

“The irony of doing more sales in the UK is that that puts a bit of negative pressure on my margin,” said Robertson, noting international sales have a higher component of more profitable own-buy products.

He said he was “pretty confident” about Christmas trading.

“There was a bit of talk last year that maybe online growth was starting to come off a bit. I‘m not feeling that, I think mobile and iPad have helped,” he said.

ASOS shares have risen 82 percent over the last year, hitting a record 2,571 pence in October. The stock was up 4.5 percent at 2,574 pence at 1136 GMT, valuing the business at 2.1 billion pounds.

“If ASOS can grow sales at 24.3 percent in this (UK) market, it bodes extremely well for ASOS in virtually all of its markets ex UK,” said Panmure Gordon analyst Jean Roche.

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