ASOS PLC (LON:ASC) and Boohoo Group PLC (LON:BOO) saw their shares rise on Friday after investors read-across from a strong upgrade by German-owned online fashion rival Zalando.
Zalando bumped up its full-year profit guidance to €375-425mln from €250-300mln after stronger than expected third-quarter sales and profits.
As both ASOS and Boohoo have reported, Zalando said it has benefited from lower returns rates and the digital shift from consumers, profits also benefitted from the reversal of exceptional stock write-downs in March.
Just last month, Boohoo upped its own guidance as it reported a continuation of the strong trends into early autumn.
Analysts at broker Peel Hunt said: “Our sense is that both ASOS and Boohoo will continue to benefit from the step-up in actives over lockdown and an acceleration in digital trends across the market, with both offering upgrade potential over peak.”
Those at JPMorgan said the raised guidance “had been widely anticipated by the market, although not of this magnitude”.
“The comments on continuation of lower returns rates should also be supportive to Asos (and Boohoo).”
The Zalando update comes ahead of final results for ASOS due next Wednesday.
ASOS shares were up 2% to 5,376p while Boohoo's climbed over 4% to 351p