Key points:
- The ASOS Plc share price surged 10.7% on positive P1 results
- The British online fashion retailer grew its revenues 5% during the four months
- The retailer’s prospects appear quite impressive following last year’s decline
- The Best Clothing Stocks To Buy
The ASOS plc (LON: ASC) share price surged 10.69% after the British online fashion and cosmetics retailer released the unaudited trading results for the past four months.
Investors cheered the fact that the retailer grew its revenues 5% during the period in line with the firm’s guidance despite the global supply-chain disruptions triggered by the emergence of the Omicron variant.
The fashion retailer also revealed that it made significant progress in its key strategic priorities such as the soft launch of ASOS brands in Nordstrom retail stores and online, and the successful pilot of Partner Fulfills.
The retailer also launched its Premier offer, a more compelling value proposition within international markets. The firm maintained its full year revenues growth guidance of between 10% and 15% with adjusted revenues of £110 million to £140 million.
ASOS also revealed that it expects to start trading on the London Stock Exchange's main market by the end of February 2022.
Some of the crucial highlights of the report include the fact that the retailer grew its customer base by 0.3 million customers to reach 26.7 million as it focused on aggressive customer acquisition.
ASOS revealed that its gross margins fell 4% to 43% after it ramped up its stock clearance activities during the period. The firm also incurred higher freight costs as it was forced to use air freight to avoid supply bottlenecks on most global shipping routes.
The UK and US were responsible for most of the company’s growth with the UK registering 13% growth, while the US market grew 11%. However, the rest of the world saw a 15% decline driven by the longer delivery times due to the supply chain disruptions.
The retailer intends to expand its Partner Fulfills programme across the rest of Europe after a successful pilot programme in the UK with Reebok and Adidas.
Mat Dunn, ASOS Plc’s COO, commented:
“ASOS has delivered a robust start to the year, in line with the guidance we set out at full-year results, despite challenging market conditions. This performance reflects the strength of our offer, excellent customer experience and the dedication and hard work of all ASOSers. We continued to make progress against our objectives to improve the flexibility and speed of our retail model and accelerate the pace of delivery of our international growth strategy. Looking ahead, while mindful of the near-term uncertainty relating to the pandemic, our guidance for the full year remains unchanged.”
ASOS shares have fallen over 53% in the past year and seem cheap at current prices given the positive results released today. Long term investors may find the shares quite attractive and may consider opening new positions at current prices.
*This is not investment advice. Always do your due diligence before making investment decisions.
ASOS share price.
ASOS shares surged 10.69% to trade at 2516.5p, rising from Wednesday’s closing price of 2273.5p.