Asos Plc rose the most in six months after U.S. and European sales beat estimates and Chief Executive Officer Nick Robertson said the online clothing retailer would keep boosting the share of revenue from outside the U.K.
“Asos is increasingly a global business and in internet terms the U.K. represents just 3 percent of global internet traffic,” Robertson said today in a Bloomberg television interview. “We have to continue to look externally, outside of the U.K., for where all that growth opportunity lies.”
Revenue from Britain may amount to “a little less than 10 percent” of the total within a few years, Robertson said in the interview, down from 35 percent in the first quarter. Asos has cut the proportion of U.K. sales in half since fiscal-year 2010, when 72 percent of revenue was domestic.
There is a “vast opportunity for Asos to benefit from the introduction of genuine local retail propositions in overseas territories,” Andrew Wade, an analyst at Numis Securities, said in a note to investors. “The long list of enhancements that will drive growth include free returns” as well as country-specific sites and marketing, he said.
Asos began testing free global shipping last year and said it boosted sales in the “rest of world” segment by 61 percent in the first quarter this year. The retailer, which sells designer and own-label clothes to customers in 160 countries, said first-quarter U.S. sales rose 83 percent, compared with an
average analyst estimate of 74 percent. European sales outside the U.K. gained 27 percent, also beating estimates.
The stock surged 13 percent to 1,855 pence, the biggest advance since Jan. 19. That extended the gain this year to 50 percent, giving Asos a market value of 1.51 billion pounds ($2.34 billion).
By Jessica Abrahams. Originally published by Bloomberg, 10th July 2012
Jessica Abrahams 