The British online fashion firm Asos warned of volatility in the months ahead as it reported a rise in sales and maintained its annual profits guidance. It added that profits were being squeezed by increased freight costs and global supply chain disruption caused by the Covid-19 pandemic and Brexit.
“The final weeks of June saw a softening, due to the impact on consumer demand of continuing Covid uncertainty and unseasonal weather,” Asos said.
Sales in the four months to June 30 jumped by 31 percent at constant currency rates to £1.29 billion (€1.51bn - $1.71bn), including a 60 percent rise in U.K. retail sales to £526.4 million (€615.0m -$728.0m) despite a reopening of physical stores. Previously, the e-tailer had benefited from Covid-related lockdowns in the country.
U.S. sales grew by 31 percent to £144.8 million (€169.4m - $200.5m) and in the Europan Union they were up by a fifth to £388.3 million (€455.0m - $538.3m). EU growth was driven by Germany, despite Covid curbs for much of the period. Meanwhile, the performance in Southern Europe was hit by tourism-related economic pressures “disproportionately impacting 20-somethings’ prospects,” it said..
In the rest of the world, sales fell by 2 percent to £182.6m (€213.2m - $252m).
Chief executive Nick Beighton indicated that the results had been delivered “against a backdrop of continued social restrictions and global supply chain pressures”.
“We anticipate a measure of volatility to continue in the near term, given the rapidly evolving Covid situation worldwide,” the company said. It also noted that the product mix shift reflected recent lockdown easing, with “occasion wear” rising in popularity.
Asos expects its underlying growth rate for the two months to Aug. 31, when its fiscal year ends, to be broadly in line with the same period last year and forecast full-year adjusted pre-tax profit to be in line with its expectations.