Business

Asos: Animal print and plus-size clothing boost profits

Asos dress Image copyright Asos

Soaring sales of animal print clothing helped Asos post a £500m rise in sales last year.

The online fashion retailer sold 1.3 million animal print garments across both menswear and womenswear, offering 2,000 options during the period.

The firm reported revenue of £2.4bn for the year to 31 August, with profits jumping 28% to a better than expected £102m.

Shares jumped 15% on the news but are still down by about 10% this year.

Asos chief executive Nick Beighton said: "The potential for our business is huge and we remain focussed on building Asos into the world's number one destination for fashion-loving twenty-somethings."

During its financial year, Asos said it added around 5,000 new items to its website every week, with about 87,000 products in stock at any point in time.

Other popular trends included button through dresses, with more than half a million garments sold in varying fabrics and prints.

Image copyright Getty Images
Image caption Sales of plus size clothing climbed

Sales of inclusive fit sizes - including petite, tall, maternity, plus-size, curve and wide - also jumped by 37%.

Asos sales have risen more than a fifth in each of the past three years as consumers continue to buy more online.

While the company has outperformed high street rivals such as Next or Marks and Spencer, investors get nervous when it misses its targets.

Shares had dropped by a fifth since January before Wednesday's results and fell sharply in July when the retailer missed its third quarter targets.

Asos shares rose £7.80 to £57.78 in afternoon trading, valuing the company at £4.2bn. The rise has erased some of this year's losses: the shares were above £68.64 in early January.

Richard Hunter at Interactive Investor said: "Of slight concern is the fact that Asos will need to maintain this breakneck speed of growth to continue justifying its lofty valuation, as evidenced in the July update when the shares were hit after slightly weaker than expected sales.

"However, its ongoing investment in the business and planned international further expansion means there is much to go for."

Greg Lawless at Shore Capital maintained its "buy" rating on the shares.

"We believe that Asos remains a structural winner, given the shift online by consumers, together with harnessing the global opportunity as the 'go-to' platform for online clothing," he said.

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