ASOS on track to hit year targets as first-half profit rises

British online fashion retailer ASOS met forecasts with an 18 per cent rise in first-half profit and said it was on track to achieve its sales and margin guidance for the full year.

Established in 2000 for fashion-conscious twentysomethings, ASOS was an early ecommerce success story, but is seeing growing competition from the likes of Germany’s Zalando and British rival Boohoo, as well as from traditional store-based chains improving their online offerings.

ASOS said on Tuesday it made a pretax profit of £21.2 million in the six months to Feb. 29, in line with analysts’ average forecast and up from 18 million pounds in the same period last year. Retail sales rose 24 per cent on a constant currency basis to £648.6 million , as the firm grew its active customer base 17 per cent to 10.9 million. UK sales rose 25 per cent, while international sales were up 24 per cent.

ASOS said investment in technology and logistics was bearing fruit, delivering 21 percent growth in visits to its sites and growth in average order frequency, basket value and conversion. “I’m pleased to confirm that we are on track to achieve our previously stated sales and margin guidance for the full year,” said chief executive Nick Beighton, who took over last September from founder Nick Robertson.

In October ASOS forecast sales growth for the 2015-16 year of about 20 per cent and a maintained operating margin of 4 percent. Beighton wants ASOS to concentrate its efforts and investment on its main markets of Britain, France, Germany and the United States.

Last week the firm said it will discontinue local operations in China, with the ASOS.com website now servicing customers in the territory rather than a local website. Shares in ASOS which listed at 20 pence in 2001, have fallen 18 per cent over the last year and closed at £34.03 on Monday, valuing the business at £2.82 billion.

Reuters