Asos will continue to outperform the UK market and deliver double-digit growth as long as it continues to “move with velocity” across product, technology, delivery and customer experience, chief executive Nick Beighton has said.
Retail sales at Asos jumped 30% year on year to £790.4m for the four months to 31 December, following an “exceptional performance in a challenging” UK market.
UK sales were up 23% on 2016 to £300m. In the US, sales increased by 24% to £102.4m. In Europe they were up 42% to £235.2m, while the rest of the world was up 34% to £151.9m.
Retail gross margin for the four months was up 80 basis points on last year, as expected.
Despite the jump in sale, Beighton was under no illusions that the UK market would continue to grow at such a high level given wider macro-conditions, but remained confident Asos would outperform its retail peers: “As a UK citizen who runs an organisation in the UK, I’m very concerned about anything that affects UK customers – of course I am. UK growth can’t continue at that pace forever. We overperformed in the last four months.
“But we can just do what we are doing well. If we focus on product and customer experience, and if we move with velocity we can continue to win. It is core to our DNA and it is core to our customer base. We will continue to move as quickly as we can to keep ahead.”
Beighton said focusing on the customer was integral to the business’s success: “It starts with the product and the experience the customer gets. It is a founding pillar at Asos. We always look through our customers’ eyes.”
During the period 80% of traffic in the UK was on mobile. That dropped to 74% in Europe and 60% in the US, but Beighton said the other territories were “catching up”.
The business said there was no change to its full-year guidance, but capital expenditure was now expected to be at the upper end of the £200m-to-£220m range.
Beighton said around half of the £220m would will go into technology, and £80m would be invested into automating its distribution centre in Berlin and developing the DC in Atlanta, as well as expanding its London head office.
In the four months to 31 December, Asos made 700 consumer-facing improvements. The number of active customers rose 19% on 2016, while the average basket value increased 3%. Order frequency increased by 8% and conversion was up 20 basis points.