Asos sales rise despite demand ‘volatility’

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Asos has posted an increase in third-quarter sales but cautioned that “volatile demand” and supply chain pressures are likely to persist during the coronavirus crisis.

The online fashion giant said underlying revenues, adjusted to account for returns during the previous year, jumped 21% in constant currencies to £1.29bn during the four months to June 30.

Sales in its core UK market surged 36% to £526.4m during the period, while its businesses in the US and Europe registered 20% and 15% upticks respectively.

Asos said it attracted an additional 1.2 million customers during the four-month period, pushing its active customer base over 26 million.

Despite its progress, Asos said gross margins slipped 150 basis points amid headwinds from foreign exchange rates and increased freight costs as a result of global supply chain disruption.

The etailer said it expects “a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide”.

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Asos hailed the “good flexibility” it had displayed to reshape its product proposition during lockdowns to meet “unpredictable” demand but conceded that “delivery delays coming out of key areas of supply” would continue to impact the business.

Asos insisted, however, that its opportunity to grow in the longer term was “greater than ever” and said it would press ahead with its investment plans.

Earlier this week, the retailer launched a joint venture with US department store chain Nordstrom, which acquired a minority stake in the Topshop, Topman, Miss Selfridge and HIIT brands. The deal is aimed at turbo-charging Asos’ growth in the US.

Asos boss Nick Beighton said: “Asos has delivered another strong performance against a backdrop of continued social restrictions and global supply chain pressures, and I would like to thank our Asos team members for their continued commitment, resilience, and enthusiasm through the pandemic.

“Although mindful of the continued impacts of the pandemic on our customers in the short term, we believe that the structure of the global ecommerce fashion market has changed forever, which will drive an increase in online fashion sales over the long term.”