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Asos growth held back by US disruptions

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Fashion retailer Asos has continued to grow sales both in the UK and overseas in the second quarter. The retailer was held back by disruptions to the US business and competitive Christmas trading.

Total retail sales for the three months to 28 February were 11% to £641.3m, and EU retail sales rose 8% while the rest of the world sales soared to 21%. US shipping delays pushed sales down to around 3%.

Chief executive Nick Beighton said: “As our Atlanta warehouse went fully online, demand far exceeded our expectations. Whilst very encouraging for the longer term, this caused a significant short-term despatch back log which we have now cleared.”

Guidance was reiterated for 15% sales growth for the full year.

Ed Monk, associate director from Fidelity Personal Investing’s share dealing service said, “Asos’ festive wardrobe malfunction was confirmed today with sales growth in the six months to March rising 11% on a constant currency basis, reflecting the worse trading flagged in its December profit warning.

“Six months ago, Asos seemed to be defying gravity in the retail sector with ever-rising sales despite the gloom on the high street, but the December warning brought it back to earth with a bump.

“Asos was outflanked by heavy, sector-wide discounting over Black Friday sales in November and has to make upground with deep price cuts of its own, hitting profits.”

Beighton added: “We will be increasing investment in price and marketing in the second half, particularly in France and Germany.

“Given the actions we are taking together with an improving US performance, we believe the group will deliver stronger growth in the second half. Consequently, we remain confident that we will meet guidance for the full year.”




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