Asos pre-tax profits fall 22% as it invests for long-term growth

Asos generated profits of £20.1m in the six months to February 28.

The online fashion giant revealed sales surged 34% to £481.7m. Retail sales also increased 34% to £472.3m. Within that UK retail sales were up 32% to £182m and international sales up 35% to £290.2m.

Asos said retail gross margins had increased 60bps and its active customer base soared 36% to 8.2 million.

Asos has accelerated investment in warehousing and technology to support the growth of the business. It plans £68m of investment this year.

Asos chief executive Nick Robertson said: “This continued strong growth was achieved at the same time as acceleration in our investment in logistics, our IT platform and our overall customer offering, whilst also continuing to invest in our China start-up. Our £68m investment during the current year will more than double the sales capacity with greatly enhanced efficiencies at our UK warehouse, a new Eurohub in Berlin, an expanded facility in Ohio in the US and a new warehouse in Shanghai.

“This increased pace of investment has reduced our profitability in the period, but will deliver significantly increased capacity as well as efficiencies in the longer term. Asos is not and has never been about the short-term; the scale of the global opportunity remains as exciting as ever and we are investing for the many opportunities ahead.”