Asos sees profits soar but sounds caution about Covid impact on disposable incomes

Laveta Brigham

Asos mobile: Getty Asos on Wednesday cheered higher sales and profits, but the online fashion giant sounded caution over how the virus crisis could put pressure on the disposable income of younger shoppers. The London-headquartered retailer has been one of the winners in the lockdown as people shopped more online […]

Asos mobile: Getty
Asos mobile: Getty

Asos on Wednesday cheered higher sales and profits, but the online fashion giant sounded caution over how the virus crisis could put pressure on the disposable income of younger shoppers.

The London-headquartered retailer has been one of the winners in the lockdown as people shopped more online while High Street chains had to close sites for months.

There was high demand for sportswear, lingerie and casual clothing and the firm also saw fewer returns. Customer numbers rose by 3.1 million to 23.4 million.

That coupled, with a good first-half performance, helped revenues in the year to August 31 rise 19% to £3.3 billion.

Pre-tax profits leapt to £142.1 million from £33.1 million.

However, Asos warned: “Whilst we are well positioned for peak trading and the year ahead, we are cautious on the outlook for consumer demand, and will remain so until lifestyles and financial stability for our 20-something customers start to normalise.”

It pointed out that the timeline for containment of the virus and a vaccine still look uncertain, and some countries where it operates face second lockdowns.

Chief executive Nick Beighton told the Evening Standard: “In the short term we are mindful of potential impacts ahead from Covid-19. We don’t feel the full impact has worked its way through to employment, particularly for our customer base. We worry that could have a impact on spending for twenty-somethings. Longer term we are very confident about our prospects as an online global leader.”

The boss also said that Asos is mindful that there is not likely to be the traditional Christmas party season in the final three months of the calendar year, where it typically sees high demand for ‘going-out’ party outfits.

Asos said: “It is clear that a normal pattern of social events is not going to resume in the short term so whilst we have confidence in our ability to continue growing our market share globally, we are cognisant of the economic impact this crisis is having on our 20-something customers and the pressure on their disposable incomes.”

Following the coronavirus outbreak, Asos had most of its 3000 London-based staff working from home. Around a third are back in, with social distancing measures in place.

During the lockdown it got models to do their own make-up and photos from home.

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