Asos shows signs of recovery following record Black Friday sales

Asos has reported an “encouraging start to the year” in its trading update on Thursday, with the company citing a “record Black Friday”, good performance across all regions, and strong customer engagement.

For the final four months of 2019, group revenue at the online retail giant was up 20 percent to 1.1 billion pounds.

In the UK, sales were up 18 percent to 408.9 million pounds compared to 347.8 million pounds in the prior-year period, EU sales rose to 332.5 million pounds from 275.9 million pounds, while US sales increased to 139.3 million pounds from 113.5 million pounds.

This is good news for the British retailer who in October reported nosediving profits following issues with warehouses in the US and Germany, emblematic of broader troubles that plagued the retailer in 2019.

Asos sales boosted by record Black Friday

“We made good progress against the clear priorities we set out for FY20 including improvements in product choice and stock availability; presentation and social media engagement; and optimising customer acquisition and reactivation,” the company said in the trading statement.

“However, there is still much work to be done to capitalise on this encouraging start as we begin to cycle the improvements we made in the prior year in terms of presentation and customer engagement. Our plans and outlook for the year therefore remain unchanged as we continue to focus on the actions required to support our long-term growth and the retention of those customers we have recently acquired.”

Total orders were also up 20 percent to 27.7 million due to a “robust operational performance” during the peak period, while it also saw strong customer momentum, with visits up 23 percent year-on-year and a 1.4 million increase in active customers during the period.

Although the retailer’s gross margin was down 170 basis points, it said the figure reflected US duty and investment in customer acquisition which was planned.

Looking forward, Asos said it is on track with its plans for FY20 and its outlook remains unchanged.

Nick Beighton, CEO, said in a statement: “Asos has delivered an encouraging start to the year. Strong customer acquisition activity supported by robust operational performance has driven good momentum in all our markets. As we said in October, the focus for this year is to further enhance our capabilities and leverage the investments we have made. It is still early in the year and much remains to be done, but we are encouraged by the progress we have made so far. We remain confident in our ability to capture the substantial opportunity ahead of us.”

Photo credit: Asos, Facebook