Business

Online retailer Asos sees exports boosted by weak pound

Shot of woman walking up catwalk Image copyright Getty Images
Image caption Asos online fashion sales jumped in the UK and internationally

Online fashion retailer Asos has seen a jump in half-year profits and sales driven by an "accelerated international performance".

The company said the fall in sterling since the EU referendum, had boosted exports, enabling it to cut prices.

Asos, which targets people in their twenties, now has more than five million active customers in the UK.

Profits for the six months to the end of February rose by 14% to £27.3m. Sales hit £889.2m, a rise of 31%.

UK retail sales rose by 18% and international sales leapt by 42%.

"As a net exporter, sterling weakness has created a FX tailwind for the business which has enabled investment above previously planned levels into both price and proposition," said chief executive, Nick Beighton.

As a result, Asos said it expected full-year retail sales to rise by between 30 and 35%. Previously it said it expected sales to go up by 25-30%.

However, its gross profit margin fell because of the price cutting, and its full-year profit before tax is predicted to be "broadly in line with market consensus".

Its shares fell by more than 6% in early trade, before recovering some ground. At lunchtime they down by nearly 4%.

'Impressive'

Asos now has a total of 14.1 million active customers worldwide, up from 10.9 million in February of last year. It sells more than 85,000 products all over the world. As well as the UK site, it also has local websites in the US, France, Germany, Spain, Italy, Australia and Russia.

In February, its websites were visited 127 million times.

"Things have been pretty bleak for the UK's High Street retailers recently, which may be in part due to the sustained success of online giants like ASOS," said George Salmon, equity analyst at Hargreaves Lansdown.

"ASOS' market cap now exceeds that of several FTSE 100 companies. However, with plenty of untapped potential across Europe and the US, the king of the AIM market [a junior stock market] has plenty of gas left in the tank, and looks set to continue its impressive record of double digit sales growth for years to come," he added.

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