Asos pre-tax profits surge 329%

Asos has reported a pre-tax profit increase of 329% to £142.1 million which it said has been the result of “removing non-strategic costs from the business” as well as improvements in efficiency following transformational investments in areas such as automation.

During the full-year ending 31 August 2020, the online pureplay retailer also saw sales surge 19% to £3.3 million as it adapted its offering to serve lockdown shoppers.

The online retailer now has 23.4 million active customers (up from 20.3 million last year) – 7.1 million of which are UK shoppers.

Nick Beighton, Asos CEO, said: “After a record first half which saw us make progress in addressing the performance issues of the previous financial year, the second half will always be defined by our response to Covid-19. I am proud of the way Asos met this challenge head on, putting our duty to act as a responsible business at the heart of our approach and working to balance our performance in that context. As well as protecting staff, suppliers and customers, we’ve driven efficiency and have emerged a stronger, more resilient and agile business whilst delivering strong profit and cash generation.

“I am pleased by the improvements we have made this year but there is still more for us to do to continue our progress. Whilst life for our 20-something customers is unlikely to return to normal for quite some time, Asos will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail.”

Sofie Willmott, lead analyst at GlobalData, said it is the retailer’s ability to rapidly evolve to meet the changing needs of its customers which has resulted in a rewarding year, despite the fact that clothing and footwear in general has been one of the worst hit sectors during the pandemic.

“As a young and agile business, compared to many other clothing specialists that have cumbersome legacy store portfolios to contend with, Asos successfully pivoted its product range in its H2 to focus on categories more relevant for shoppers’ lockdown lifestyles. Casualwear, beauty and sportswear have all outperformed with sportswear sales increasing c50% and the retailer’s own sports brand Asos 4505 benefitting, up 89%. The shift in category focus also drove down returns rates with these product areas being less fit-critical and customers shopping more purposefully, reducing warehouse processing costs and positively impacting profits.”