ASOS shares jump 18% | Biggest 1-day gain since 2004

<p>Shares in online fashion retailer ASOS jumped 18% after the firm reported a 30% jump in UK retail sales for the three months ending 28th […]</p>

Shares in online fashion retailer ASOS jumped 18% after the firm reported a 30% jump in UK retail sales for the three months ending 28th February. Total group retail sales rose 19% for the same reporting period.

Results summary:

  • UK retail sales +30% for the last 3 months

  • UK retail sales +27% for the last 6 months

  • Total retail sales +22% for the last 3 months

  • Total retail sales +17% for the last 6 months

  • Retail gross margin -3.2% (3 months) and -2.7% (6 months)

  • 9.3m active customers (+13%)

All about positive momentum

This earnings report boost confidence on one main front; it shows the firm continues to deliver upside momentum on both underlying performance and growth. This is extremely encouraging.

Retail sales growth has accelerated over the first two quarters of the retailers’ fiscal year. In the UK, retail sales grew from 104m in Q1 to 126m in Q2, and this trend is evident across all regions. On a consolidated level, sales grew from 246m to 290m. The good news isn’t just on a quarter by quarter level. Take the picture back two years and the same reporting period this time around remains much stronger. For H1 this year, the retailer saw sales of 536m compared to 472m last year and 352m in 2013. That’s positive momentum.

The potentially best news of all is historically the second quarter is not the best performing quarter. If we use Q2 performance as the new benchmark for the rest of the year, the retailer could be looking at total sales of around 1.1bn, from 955m a year ago and 753m in 2013. This would represent a growth of 17% year-on-year.

International sales represented 57% of total sales for the first half of the year at ASOS. This remains fairly consistent with contributions made in prior years, which was around 61%.

See chart below

ASOS

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