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ASOS jumps as full-year profit narrowly tops forecasts, online retailer maintains current year guidance

Published: 18:26 17 Oct 2018 AEDT

ASOS model
ASOS reported a 26% rise in retail sale to £2.36bn, in line with the guidance it issued in July

ASOS plc (LON:ASC) shares jumped higher on Tuesday after it reported a 28% jump in full-year profits, narrowly topping forecasts, with the online fashion retailer also maintaining its guidance for the new financial year.

The AIM-listed firm saw its pre-tax profit increase to £102mln for the year to August 31, up from £80mln a year earlier, and just ahead of the top of the forecast range of £80mln-£101mln.

READ: £250mln wiped from value of ASOS as biggest shareholder cashes in

The group reported a 26% rise in retail sales to £2.36bn, in line with the guidance it issued in July, with a growth of 23% in the UK and 27% overseas.

ASOS forecast sales growth of 20%-25%for the 2018-19 year and said it expected to grow at that rate for the medium term, with an annual capital expenditure of £230mln-£250mln.

The firm’s chief executive, Nick Beighton said: "ASOS is moving fast and is as differentiated as ever. The potential for our business is huge.”

ASOS shares fell sharply in July after the firm missed analysts' forecasts for sales growth in the four months to June 30, and the stock has fallen by 26% so far this year.

In early trading on Tuesday, ASOS shares were up 10.6% at 5,532p.

Richard Hunter, head of markets at interactive investor, commented “Within the beleaguered retail sector, ASOS is a breath of fresh air. These numbers further underline its strength.”

He added; “Gross margin has also improved, earnings per share are markedly higher and management’s outlook is extremely positive. If the UK retail sector is supposedly in the doldrums, ASOS has not got the memo.”

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