The fashion online retailer Asos indicated that its full-year profit will be at the top end of market expectations but warned that it faces £15 million (€16.8m-$20.5m) in Brexit tariff costs.

Sales jumped by 23 percent to £1.36 billion (€1.53bn-$1.86bn) in the four months to Dec. 31, with a 36 percent rise in U.K. sales to £554.1 million (€622m-$757m), driven by high demand for activewear and loungewear as Covid-19 restrictions were tightened.

EU retail sales were up by 18 percent to £390.7 million (€438m-$533m) and sales in the U.S. rose by 13 percent to £156.8 million (€176m-$214m). Rest of world revenues climbed by 15 percent to £224.2 million (€251m-$306m).

Pre-tax profits for the year to Aug. 31, 2021 are expected to rise to around £170 million (€191m-$232m), compared with analysts’ forecasts of £141 million (€158.0m-$192.4m).

Under the trade deal between the EU and U.K., there are no tariffs for goods produced locally. However, British companies which send goods originating from third-party countries to customers in the trading bloc face potential duties. In 2016, Asos set up its Berlin warehouse in preparation for Brexit, allowing it to service EU customers from the site.

With restrictions likely to remain for the balance of the company’s fiscal first half, Asos expects a first-half net Covid benefit on pre-tax profit of at least £40 million (€45m-$54m). It noted that additional costs caused by the pandemic are more than offset by cost reduction from lower return rates.