REG - ASOS PLC - Trading Statement
16/06/2022 07:16
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RNS Number : 1091P ASOS PLC 16 June 2022
16 June 2022
ASOS plc ("the Company")
Trading Statement for the three months ended 31 May 2022
· Since the end of February, ASOS has delivered accelerating sales driven by
strong operational performance and an increase in event-led demand, with
improving momentum in the US and good performance in the UK
· Gross sales accelerated, however net sales were impacted by a significant
increase in returns rates in the UK and Europe towards the end of the period,
reflecting inflationary pressures on consumers which has a disproportionate
impact on profitability
· ASOS continues to make good strategic progress, underpinned by a compelling
consumer offer, the roll out of Partner Fulfils, expansion of Premier, and the
continued growth of the Topshop brands across key territories
· Guidance for the year updated to reflect uncertain consumer purchasing
behaviour and the potential continuation of higher returns with revenue growth
expected to be 4% to 7% and adjusted PBT now expected to be in the range of
£20m to £60m
· Separately, ASOS today announces the appointment of José Antonio Ramos
Calamonte as Chief Executive Officer and Jørgen Lindemann as Chair
Three months to 31 May Nine months to 31 May
£m(1) 2022 2021 CCY(2) Increase 2022 2021 CCY(2) Increase
CCY(2,4) Increase (Ex Russia)
Reported Increase Reported Increase
UK total sales 431.8 415.9 4% 4% 4% 1,327.2 1,241.7 7% 7%
EU total sales 294.0 310.2 (2%) (2%) (5%) 871.4 904.6 -% (4%)
US total sales 141.9 117.5 15% 15% 21% 394.5 350.3 12% 13%
ROW total sales 115.7 144.3 (8%) (20%) (20%) 394.3 467.2 (13%) (16%)
Total group revenue(3) 983.4 987.9 4% -% -% 2,987.4 2,963.8 2% 1%
( )
(1)All numbers subject to rounding throughout this document, (2)Constant
currency is calculated to take account of hedged rate movements on hedged
sales and spot rate movements on unhedged sales, (3)Includes retail sales,
wholesale and other income. All references to segmental sales throughout the
document are total sales unless otherwise stated. Any reference to total or
retail sales growth throughout the document is on a constant currency basis.
(4)Excluding Russia reflecting decision announced 2(nd) March to suspend sales
in the region. This is calculated by removing the impact of trade in Russia in
the prior year period
Mat Dunn, COO, commented:
"At our half year results, we set out the actions we had taken as we faced
into a more challenging backdrop, notably the work undertaken in the face of
the global supply chain challenges which led to an improved stock profile and
increased newness and availability. We saw the benefit of this come through in
the shape of strong gross sales and a further acceleration of growth in the
US. At the same time, we noted that the impact of inflationary pressures was
yet to be felt by our customers.
What is now clear, based on the significant increase in returns rates that we
have seen, is that this inflationary pressure is increasingly impacting our
customers shopping behaviour. It is too early to tell for how long the current
pattern of customer behaviour will continue but we are taking swift and
decisive steps to minimise the impacts whilst continuing to deliver against
the strategic initiatives we laid out in November that will ensure that ASOS
builds for the long-term."
P3 Results Summary
· All sales numbers are quoted on a constant currency basis and exclusive of
Russia sales in the base period, following ASOS' decision to suspend sales to
Russia on 2(nd) March 2022
· Robust market share performance within key territories, reflecting the
continued attractiveness of the customer offer
· Revenue growth of 4% (against a prior comparative growth rate of 47%)
reflecting:
o P3 gross sales growth broadly in line with expectations as ASOS hurdled
tough comparatives in the prior year, with an acceleration throughout the
period; a result of strong operational performance and increased event-led
demand
o Return rates in UK and Europe increased significantly as shopping
behaviours changed in line with the impact of increased inflationary pressures
on discretionary spend
o Net revenue growth has accelerated in May with an exit rate of 10%
· Active customer base +0.1m excluding Russia, as new customer acquisition
slowed with the annualization of both the successful Topshop acquisition and
prior year COVID-19 restrictions
· Gross margin declined by 310 bps to 44.0% driven by:
o Elevated freight costs as contractual rates locked in for H2 are at a
higher rate year-on-year
o Sustained levels of promotional activity
o Product mix
Territory Performance
· UK grew by 4% with accelerating growth throughout the period, as the Company
cycled a period of more normalised comparatives in the second half of P3.
Strong performance in occasion-wear amidst uplift in demand driven by
holidays, weddings and events partially offset by increased return rates
· EU declined by 2%, with return rates trending above pre-pandemic levels in
some territories as inflationary pressures impacted consumer purchasing
behaviours
· US grew by 15%, supported by continued strength of the Topshop brands,
targeted promotional activity, and increased demand for going out wear
· ROW declined by 8%; however, Australia returned to growth as delivery
propositions improved and Premier was reactivated
Business Update
· Strong operational progress as demonstrated by robust stock position
supporting increased newness and availability
· The rollout of Partner Fulfils continues to progress to plan, with the
delivery of range extension in the UK. Expansion to key territories within
Europe remains on track for the second half of FY22
· Growth in Premier customers of 19% year-on-year, driving increased engagement
and associated improvements in frequency, conversion, and average customer
value
· Continued growth in the Topshop brands, +69% growth in P3 year-on-year, with
350 new style drops per week alongside increased speed to market
· Continued progress on Nordstrom partnership with the official launch of ASOS
Design in 11 stores in the US, an expanded collection available on
Nordstrom.com, with Topshop and Topman relaunched in Nordstrom Canada stores
· Return of ASOS Design to growth of +5%, supported by strong occasion-wear
offer amid increased demand for going out wear, with ASOS Edition +84%
year-on-year
· In May, ASOS launched the trial of a new partnership with clothing resale
service, Thrift+, along with the launch of its second circular design
collection
· Process to build out wider Executive team continues, including the appointment
of Caroline Ross to the position of Interim Chief People Officer
Outlook
· Sales now expected to be in the range of 4% and 7% reflecting market
volatility and an increased returns rate
· Gross margin now expected to be between 150bps and 200bps adverse, as elevated
returns are expected to drive higher levels of markdown and a continuation in
the negative impact of returns on product mix
· The impact of consumer behaviour on sales and in particular the anticipated
continuation of higher return rates leads to a revised adjusted PBT range of
between £20m and £60m
o As well as the impact of higher returns on warehousing and delivery costs,
the guidance also considers both increased markdown and labour inefficiency to
clear the returned stock
o The bottom of the range anticipates no improvement in returns rates
relative to April levels along with some weakening in gross sales reflecting
consumer pressure
o The upper end of the range projects a continuation of May's demand trends
(against softer P4 comparatives) but with customers adjusting shopping
behaviours and a resultant improvement in return rates from April levels
· Net debt expected to be in the range £75m and £125m reflecting the
combination of lower profit and higher inventory levels
Investor and Analyst conference call:
ASOS will be hosting a conference call for analysts and investors at 7.45am
(UK time) on 16(th) June 2022. To access live please dial 0800 640 6441/ +44
20 3936 2999, and use passcode: 169967. A recording of this webcast will be
available on the ASOS Plc website later today:
https://www.asosplc.com/investor-relations/
For further information:
ASOS Tel: 020 7756 1000
plc
José Antonio Ramos Calamonte, Chief Executive Officer
Mathew Dunn, Chief Operating Officer & Chief Financial Officer
Taryn Rosekilly, Director of Investor Relations
Website: www.asosplc.com/investors
Headland Consultancy Tel: 020 3805 4822
Susanna Voyle / Stephen Malthouse
JPMorgan Cazenove
Tel: 020 7742 4000
Bill Hutchings / Will Vanderspar
Numis Securities Tel: 020 7260 1000
Alex Ham / Jonathan Wilcox / Tom Jacob
Berenberg Tel: 020 3207 7800
Michelle Wilson / Jen Clarke
Background note
ASOS is a destination for fashion-loving 20-somethings around the world, with
a purpose to give its customers the confidence to be whoever they want to be.
Through its app and mobile/desktop web experience, available in ten languages
and in over 200 markets, ASOS customers can shop a curated edit of over
100,000 products, sourced from nearly 900 global and local third-party brands
alongside a mix of fashion-led own-brand labels - ASOS Design, ASOS Edition,
ASOS 4505, Collusion, Reclaimed Vintage, Topshop, Topman, Miss Selfridge and
HIIT. ASOS aims to give all of its customers a truly frictionless experience,
with an ever-greater number of different payment methods and hundreds of local
delivery and return options, including Next-Day Delivery and Same-Day
Delivery, dispatched from state-of-the-art fulfilment centres in the UK, US
and Germany.
Important information
This announcement may include statements that are, or may be deemed to be,
"forward-looking statements" (including words such as "believe", "expect",
"estimate", "intend", "anticipate" and words of similar meaning). By their
nature, forward-looking statements involve risk and uncertainty since they
relate to future events and circumstances, and actual results may, and often
do, differ materially from any forward-looking statements. Any forward-looking
statements in this announcement reflect management's view with respect to
future events as at the date of this announcement. Save as required by
applicable law, the Company undertakes no obligation to publicly revise any
forward-looking statements in this announcement, whether following any change
in its expectations or to reflect events or circumstances after the date of
this announcement.
Appendix 1 - Estimated Total sales growth by period in sterling, including
Russia
P3 is restated in the prior year comparative to reflect only March, April and
May. June is included in P4.
Year ending 31 August 2022
£m P1(1) YOY% P2(1) YOY% P3(1) YOY% P4(1) YOY% 2021/22 YTD YOY%
UK total sales 645.2 13% 250.2 (2%) 431.8 4% 1,327.2 7%
EU total sales 390.2 (3%) 186.7 (4%) 294.0 (5%) 871.4 (4%)
US total sales 172.6 7% 80.5 13% 141.9 21% 394.5 13%
ROW total sales 185.1 (20%) 93.5 1% 115.7 (20%) 394.3 (16%)
Total sales 1,393.1 2% 610.9 -% 983.4 -% 2,987.4 1%
Year ended 31 August 2021
P1(1) YOY% P2(1) YOY% P3(1) YOY% P4(1) YOY% 2020/21 YOY%
£m
UK total sales 571.3 35% 254.5 46% 415.9 85% 410.3 5% 1,652.0 36%
EU total sales 400.6 18% 193.7 22% 310.1 33% 280.9 (6%) 1,185.3 15%
US total sales 161.7 12% 71.2 8% 117.5 25% 115.8 4% 466.2 12%
ROW total sales 230.5 16% 92.4 1% 144.5 2% 139.6 (19%) 607.0 1%
Total sales 1,364.1 23% 611.8 25% 988.0 43% 946.6 (3%) 3,910.5 20%
( )
( )
( )
(1)Periods are as follows:
P1: four months to 31 December
P2: two months to 28/29 February
P3: three months to 31 May
P4: three months to 31 August
Appendix 2 - Estimated Total sales growth by period at constant currency,
including Russia
Year ending 31 August 2022
P3 is restated in the prior year comparative to reflect only March, April and
May. June is included in P4.
£m P1(1) P2 (1) P3 (1) P4 (1) 2021/22
YOY% YOY% YOY% YOY% YOY%
UK total sales 13% (2%) 4% 7%
EU total sales 2% -% (2%) -%
US total sales 11% 12% 15% 12%
ROW total sales (15%) 2% (20%) (13%)
Total sales 5% 1% -% 2%
Year ended 31 August 2021
P1(1) P2 (1) P3 (1) P4 (1) 2021/22
£m YOY% YOY% YOY% YOY% YOY%
UK total sales 35% 46% 85% 5% 36%
EU total sales 17% 20% 34% (7%) 15%
US total sales 16% 13% 40% 15% 21%
ROW total sales 20% 9% 10% (14%) 6%
Total sales 24% 26% 47% (1%) 22%
(1)Periods are as follows:
P1: four months to 31 December
P2: two months to 28/29 February
P3: three months to 31 May
P4: three months to 31 August
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