Bloomberg News

Asos Second-Quarter U.K. Sales Growth Slows to 1 Percent

October 14, 2011

(Updates with analyst comment in fourth paragraph, shares in fifth.)

Oct. 14 (Bloomberg) -- Asos Plc, the U.K.’s second-largest online clothing retailer, reported a slowdown in U.K. sales growth in the fiscal second quarter that was worse than analysts expected, as sluggish consumer sentiment weighed on shoppers.

Revenue in the U.K. rose 1 percent to 44.1 million pounds ($70 million) in the three months ended Sept. 30, compared with a year earlier, the London-based retailer said today in a statement. That compares with the 5 percent median estimate of three analysts compiled by Bloomberg and 15 percent growth in the first quarter.

The U.K. market has become “more challenging,” Chief Executive Officer Nick Robertson said in a phone interview today, as promotional activity and pressure on younger customers from higher education fees and lack of credit weigh on sales. He sees flat to low-single-digit sales growth “at best” in the second half. The company is adding country-specific websites in markets including Australia, Spain and Italy, and has introduced iPhone and iPad applications to lure more 16- to 34-year-old shoppers.

Fears on U.K.

The U.K. figures “will play to fears of U.K. sales maturity approaching,” David Jeary, a London-based analyst at Investec Securities, said by phone. He has a “hold” rating on the stock. “The offset is continued strong international growth.”

Asos fell as much as 8.6 percent and was down 6.4 percent to 1,406 pence at 8:26 a.m. in London. The stock has lost 12 percent this year.

Revenue at its international unit rose 141 percent, less than the 160 percent growth in the first quarter. “With costs and stock tightly managed and retail margin ahead of prior year, we are confident of achieving results in line with market expectations,” the CEO said in the statement.

--Editors: Thomas Mulier, David Risser

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net.


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