Shares in online clothes seller ASOS PLC (LON:ASC) advanced more than 7% on Tuesday after its half-year results demonstrated improved momentum, underlined by 17% growth in the number of active customers.
Group revenues rose 21%, or 25% in constant currency (cc) terms, to £667.3mln in the six months to 29 February from £550.5mln the year before. The market had been expecting an outcome of £662.8mln.
Retail sales also rose 21% (CC: +24%), to £648.6mln from £536.4mln the year before, with UK sales growing 25% and international sales up 18% (CC: +24%).
Adjusted profit before tax climbed 18% to £21.2mln from £18.0mln the previous year, while the cash continues to roll in, with cash and cash equivalents more than doubling at the end of the period to £135.9mln from £64.9mln a year earlier.
The market consensus forecast for profit before tax was £20.1mln.
The retail gross margin improved by four-tenths of a percentage point to 47.2% from 46.8%.
“Particularly encouraging is the 17% growth in our active customers to 10.9mln, with benefits from our investment in our technology and logistics delivering 21% growth in visits to our sites and growth in average order frequency, basket value and conversion,” said Nick Beighton, chief executive officer of ASOS.
“I'm pleased to confirm that we are on track to achieve our previously stated sales and margin guidance for the full year,” Beighton added.
Cantor Fitzgerald stuck by its 'hold' recommendation but hiked its price target to 3,300p from 3,00p
“It was sensible decision to close down the loss making Chinese operations and marks, in our view, a change in direction on strategy. In particular, we believe there will be more focus on management of costs and profits rather than a quest to generate significant sales growth,” the broker said.
Shares in ASOS rose 7.88% to 3,671p on the results.