logo-loader

ASOS set for a warm weather boost

Last updated: 06:00 12 Jul 2018 BST, First published: 13:28 11 Jul 2018 BST

ASOS

Online fashion retailer ASOS plc (LON:ASC) is expected to report a sharp rise in third-quarter sales on Thursday as it continues to benefit from the e-commerce boom.

UBS has forecast a sales increase of 23% for the quarter to June 30 with warmer weather boosting demand for ASOS’s summer clothing ranges.

The Swiss bank sees no change to the full year sales guidance of 25-30% growth and an underlying earnings (EBIT) margin of 4%.

Looking ahead, UBS thinks there is likely to be more focus on developments in the US after the Supreme Court overturned a ruling that allowed pure-play online retailers to avoid sales tax in the country.

ASOS will need to levy sales tax in more states after the June 22 ruling, which knocked its share price at the time.

“However, given differing state-level threshold order values, the impact may be limited,” UBS said.

“Perhaps more interesting is the requirement to pay 18-20% import duty as more orders are fulfilled from the new US DC. This cost should be covered by lower fulfilment costs, but more clarification would be useful.”

Dunelm turnaround may not be easy in the current environment

Things may not be so comfy for fellow retailer Dunelm Group PLC (LON:DNLM), which is scheduled to issue a trading update.

If profit warnings really do come in threes then shareholders will be a bit nervous.

The curtains and cushions flogger warned at the end of May that it had recently experienced trading conditions that have been materially more challenging than had been expected, within a soft homewares market.

Like-for-like (LFL) sales in the fiscal fourth quarter were running 4.7% below the same quarter of 2017 in the bricks & mortar estate, although thanks to a 43.7% year-on-year increase in online sales, LFL sales overall were 0.1% higher than a year earlier.

The retailer said it expects total sales for the full-year to be in the region of £1.05bn, up from £955.6mln the year before.

JP Morgan Cazenove was sceptical about the retailer’s ability to turn things around given the uncertain consumer environment, with spending on big-ticket items particularly weak.

Dunelm shareholders can take heart, however, that shortly after the profit warning in May, the chairman, Andy Harrison, bought 92,452 shares at 547.53p a pop, which is a show of faith costing more than half a million quid.

Significant announcements expected

Trading updates: ASOS plc (LON:ASC), Dunelm Group PLC (LON:DNLM), B&M European Retail PLC (LON:BME), Premier Oil PLC (LON:PMO), Ten Entertainment Group PLC (LON:TEG)

Interims: Dart Group PLC (LON:DTG)

Finals: ReNeuron PLC (LON:RENE)

AGMs: Land Securities PLC (LON:LAND)

Ex-dividendsEx-dividends: To clip 0.12 points off the FTSE 100 index - Halma PLC (LON:HLMA)

Economic data: US CPI; US weekly jobless claims

Accesso's landmark deal with SEVEN marks strategic growth in the Saudi Market

Accesso Technology Group PLC (AIM:ACSO, OTC:LOQPF) chief executive Steve Brown joins Proactive's Stephen Gunnion with details of a significant partnership with Saudi Entertainment Ventures (SEVEN). Brown noted the collaboration highlights accesso's strategy to grow its global footprint,...

13 minutes ago