Asos festive sales increase despite ‘challenging’ market conditions

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Asos has posted an uplift in Christmas sales across the UK and US, but interim boss Mat Dunn flagged that supply chain issues drove “heightened clearance activity” over the festive period.

Asos reported a 5% rise in total sales year on year on a constant currency basis to £1.4bn in the four months to December 31, driven by a 13% uplift in UK sales to £645.2m.

The online fashion retailer said demand for party outfits drove its UK sales uptick over the festive period.

The etailer’s US sales rose 11% to £172.6m over the same period “despite significant port congestion and supply chain disruption inhibiting our ability to fully service demand”, while sales across the EU edged up 2% but were “significantly impacted” by local Covid restrictions.

Sales across the rest of the world declined 15% to £185.1m.

Asos’ gross margin fell 400 basis points during the four-month period, which the fashion etailer attributed to “heightened clearance activity” of underperforming spring and summer stock, as well as elevated freight costs and “use of air freight to circumvent supply chain constraints and maximise peak trading”.

The retailer said that its returns rate had normalised over the festive period in line with expectations and that Topshop lines delivered 200% growth year on year, driven by demand across the UK, US and Germany.

Asos maintained its full-year guidance of adjusted pre-tax profit of £110 to £140m and confirmed its plan to move its listing to the main market of the London Stock Exchange.

Chief operating officer Dunn said: “Asos has delivered a robust start to the year, in line with the guidance we set out at full-year results, despite challenging market conditions.

“This performance reflects the strength of our offer, excellent customer experience and the dedication and hard work of all Asosers. We continued to make progress against our objectives to improve the flexibility and speed of our retail model and accelerate the pace of delivery of our international growth strategy.

“We are also pleased to announce today that we plan to move to the main market of the London Stock Exchange. Our listing on AIM for the past 20 years has been an important part of Asos’ development, but the time is now right to move to the main market as we focus on delivering our medium-term guidance and longer-term growth ambitions.”