Asos expects profits to hit the top end of market expectations this year after the online fashion retailer’s sales of casual and active wear surged during the coronavirus lockdown.
The company, which targets the “20-something” fashion market, reported a 10% year-on-year sales rise to just over £1bn in the year to the end of June. Asos said its customer base grew by 6% to 23 million during the lockdown, with particularly strong growth in new international customers.
Asos, which will repay its furlough support from the UK government, said sales initially fell by up to a fifth when lockdown measures were introduced in March.
The company said the rebound in sales had come from a combination of growth in new customers and sales of “lockdown” product categories, such as casualwear and activewear. Asos said that while it had shifted its model to try to deliver these products, “customer demand for key ‘lockdown’ category product has outstripped supply” with sales growth of 50%.
The company said it had recorded a decline in sales in “event-led” categories, including occasionwear such as dresses and formalwear, because of workers staying at home and the shutting of restaurants, clubs and bars.
The company said that despite the impact of Covid-19 it expects pre-tax profits this year to be “towards the top end of market expectations”.
Nick Beighton, the Asos chief executive, said: “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.
“Our performance shows that we are delivering against this aim despite the tough economic and social backdrop. We have learned a lot and adapted quickly. 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 cashflow for the full year.”