The ASOS share price (LON: ASC) (ASC.L) has fallen by around 14% in the past month. Over the same time period, the FTSE AIM All-Share Index (INDEXFTSE: AXX) to which the online retailer belongs has gained around 2%.
The latest results announcement from ASOS occurred on 8 April when it released half-year results. They showed a rise in revenue of 25% compared to the same period of the previous year. This was driven higher by an increase of 1.5 million in the firm’s active customer base to 24.9 million. This growth helped to offset fewer event-led reasons for existing customers to shop during the six-month period.
In the UK, the firm recorded 39% sales growth. In the EU, sales rose by 18%, while they increased by 16% apiece in the US and rest of world. However, gross margin was 200 basis points lower at 45% as a result of higher freight costs caused by Covid-19. On an adjusted basis, the firm’s EBITDA margin gained 320 basis points to 9.2%. This reflected a net Covid-19 benefit and continued underlying improvements made including reinvestment, according to the company’s update.
Adjusted pre-tax profit increased to a record £112.9 million. ASOS has a net cash position of £92 million as at 28 February 2021.
During the six-month period the company progressed with its plan to integrate recently acquired Topshop brands. They undertook a successful relaunch on 22 February and have seen good customer momentum so far, according to ASOS. The one-off acquisition and integration costs of the Topshop deal are now expected to be around £10m, which is half the original forecast.
The firm said in its update that it will continue to invest in pricing. It is also seeking to develop its global infrastructure and improve the flexibility of its product offering. It also stated that it retains a cautious stance on the near-term consumer outlook because of the uncertain employment prospects for its core market of twentysomethings. It retained its expectations for the second half of the year, which it expects to be a cash generative period.
In the past year, the ASOS share price has risen by 98%. It is currently up 38% in the past five years. Meanwhile, the FTSE Aim All-Share index is up 55% and 73% respectively over the same time periods. The company’s stock price is 4975p at the time of writing. Its next investor update is due to be released on 20 July when it is set to announce its trading performance for the four months to 30 June.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.