ASOS reports revenue growth but increased returns rate dampens outlook
ASOS has revealed revenue growth of 4% to £983.4 million for the three months ending 31 May 2022, compared to a previous growth rate of 47%, as “return rates in UK and Europe increased significantly".
Today’s trading statement outlined that “shopping behaviours changed in line with the impact of increased inflationary pressures on discretionary spend”.
Trading guidance for the year has been updated to reflect uncertain consumer purchasing behaviour and the potential continuation of higher returns, with revenue growth expected to be between 4% to 7% and adjusted profit before tax now expected to be in the range of £20 million to £60 million.
Mat Dunn, COO at ASOS, said: “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.”
ASOS has also announced the appointment of José Antonio Ramos Calamonte as its new CEO, and Jørgen Lindemann as Chair.