Following today’s release of ASOS FY figures for 2019/20, Sofie Willmott, Lead Analyst at GlobalData, a leading data and analytics company, comments:
“ASOS has reaped the rewards of its online pureplay business model and its ability to rapidly evolve to meet the changing needs of its customers, despite its reliance on clothing & footwear which is forecast to be the worst hit sector by the pandemic. After raising sales and profit guidelines in mid-August it has delivered results at the top end of expectations with group retail sales rising to £3,171.0m and profit before tax reaching £142.1m. Following a tough year in FY2018/19 when ambitious plans to develop two major fulfilment facilities in Europe and the US simultaneously hit sales and profits, the retailer has bounced back in FY2019/20 despite the challenges COVID-19 has unexpectedly presented.
“As a young and agile business, compared to many other clothing specialists that have cumbersome legacy store portfolios to contend with, ASOS successfully pivoted its product range in its H2 to focus on categories more relevant for shoppers’ lockdown lifestyles. Casualwear, beauty and sportswear have all outperformed with sportswear sales increasing c50% and the retailer’s own sports brand ASOS 4505 benefitting, up 89%. The shift in category focus also drove down returns rates with these product areas being less fit-critical and customers shopping more purposefully, reducing warehouse processing costs and positively impacting profits.
“A tough Black Friday and Christmas period lies ahead for clothing & footwear retailers with celebrations set to be much more subdued this year, given that many countries are in the midst of a second wave of COVID-19, quashing the ability to socialise and the need for party outfits. Usually focused on going out products this time of year, ASOS will need to continue adapting its range to align with shopper demand but remains well positioned to continue to gain market share in what will be an online-dominated Christmas.”