TIDMASC
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
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-- 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
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-- 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 GBP20m to GBP60m
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-- Separately, ASOS today announces the appointment of José
Antonio Ramos Calamonte as Chief Executive Officer and Jørgen
Lindemann as Chair
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Three months to 31 May Nine months to 31 May
CCY(2,4)
Increase CCY(2) Reported CCY(2) Reported
GBPm(1) 2022 2021 (Ex Russia) Increase Increase 2022 2021 Increase 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) Co nstant 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
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-- Revenue growth of 4% (against a prior comparative growth rate of 47%) reflecting:
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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
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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
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o Net revenue growth has accelerated in May with an exit rate of 10%
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-- 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
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-- Gross margin declined by 310 bps to 44.0% driven by:
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o Elevated freight costs as contractual rates locked in for H2 are at a higher rate year-on-year
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o Sustained levels of promotional activity
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o Product mix
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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
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-- US grew by 15%, supported by continued strength of the Topshop
brands, targeted promotional activity, and increased demand
for going out wear
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-- ROW declined by 8%; however, Australia returned to growth as
delivery propositions improved and Premier was reactivated
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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
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-- Growth in Premier customers of 19% year-on-year, driving increased
engagement and associated improvements in frequency, conversion,
and average customer value
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-- 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
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-- 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
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-- 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
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-- 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
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-- Process to build out wider Executive team continues, including
the appointment of Caroline Ross to the position of Interim
Chief People Officer
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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
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-- 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 GBP20m and GBP60m
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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
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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
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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
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-- Net debt expected to be in the range GBP75m and GBP125m reflecting
the combination of lower profit and higher inventory levels
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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 plc Tel: 020 7756 1000
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
2021/22
GBPm P1(1) YOY% P2(1) YOY% P3(1) YOY% P4(1) YOY% 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
GBPm P1(1) YOY% P2(1) YOY% P3(1) YOY% P4(1) YOY% 2020/21 YOY%
------- ----- ----- ----- --------
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%
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(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.
P1 (1) P2 (1) P3 (1) P4 (1) 2021/22
GBPm 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
GBPm 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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