‘Safety-first’ ASOS set for profit growth
Posted on July 15, 2020 by Jonathan Symcox
ASOS has reported four-month sales increases despite prioritising social distancing for workers during COVID-19.
The listed eCommerce giant says it is on track to deliver strong profit growth for the full year after revenue for the period to 30th June topped £1 billion.
Despite a one per cent drop in UK revenue to £329.2m year-on-year, increases in international sales took total sales and revenue up 10 per cent.
ASOS said customer demands changed ‘dramatically’ towards casualwear as countries entered lockdown, with occasion-led categories such as dresses down.
The shift in product demand was reflected in a reduction in the average selling price, which was nine per cent lower in the period.
“Our main priority through the period was protecting the health and wellbeing of our people and our customers through the global pandemic and this was reflected in the strict social distancing protocols implemented and adhered to across our business,” a statement read.
“Against the backdrop of continued social distancing, ongoing restrictions of events and an uncertain economic outlook for our 20-something customers, we remain cautious on the short–to–medium–term outlook on demand.”
Rival boohoo has seen its share price drop dramatically after allegations that social distancing was not adhered by many of its suppliers in the Leicester area, which has the highest concentration of COVID-19 cases in the UK by a great margin.
There are 85,000 products available on ASOS platforms, sourced from 850 global and local third-party brands as well as fashion-led in-house labels. It says its warehouses are highly automated.
Nick Beighton, CEO, commented: “This has been a tough time for all businesses, but we have remained focused on doing the right thing for our people and our customers and making sure that we emerge from the current crisis as a stronger and better organisation.
“I am particularly proud of the resilience, flexibility and creativity the ASOS team and our business partners have shown.
“Our performance in P3 shows that we are delivering against this aim despite the tough economic and social backdrop. We have learnt a lot and adapted quickly, and ASOS finishes the period with improved underlying profitability.
“While we remain cautious about the consumer impact of COVID-19 looking forward, we are on track to deliver strong year-on-year profit growth and to return to positive free cash flow for the full-year.”
ASOS’s websites attracted 235.7 million visits during June.