Online fashion retailer Asos to report rising sales on overseas growth
PUBLISHED: 06:31 16 October 2017 | UPDATED: 06:31 16 October 2017
Online fashion retailer Asos is expected to report a surge in full year sales next week as it reaps the benefit of increased international expansion.
A consensus of City analysts expect the firm to clock a 35% rise in sales to £1.9 billion on Tuesday, with profits also expected to grow 24% to £79.3 million.
At its last trading update in July, Asos booked a 38% and 41% rise in sales in the US and Europe respectively as it continues to see a boost from the Brexit-hit pound.
George Mensah, analyst at Shore Capital, said: “International sales growth continues to predominantly drive the top-line of Asos, and continues to be a strong focus for management.
“We view this year and 2018 as a period of heavy investment as the company lays the foundation for further internationalisation. This investment is already helping to accelerate overseas sales growth.”
The company has previously said that, as a net exporter, the collapse in the value of sterling has helped its international sales rocket and allowed it to plough more into price cuts.
In August, Asos also announced that it will ramp up its US offering by spending 40 million US dollars (£30 million) opening a new factory in the country.
The fulfilment centre in Union City, outside Atlanta, is expected to be operational by next year and will help the firm to further tap the market for young shoppers.
Asos said it will “significantly enhance” its US proposition by providing more cost-effective, faster and more flexible delivery options.
The company currently has a small fulfilment centre in the US which manages 25% of all stateside orders, with the remainder being dispatched from the UK.
The 10 million unit capacity facility is part of the retailer’s plan to refocus on the core markets of the UK, Europe and the US.
Mr Mensah also said that Asos’s recent foray into cosmetics, with the launch of its own brand AsosMake-Up, will lead to revenue growth.
“We expect the roll-out of own-brand beauty and activewear to generate incremental revenue,” he added.
The group’s results come at a time when British high street retailers are facing a torrid time as the collapse in sterling increases import and product costs and batters consumer confidence.