Asos on track to hit £1bn of sales by 2015 as profits beat analyst expectations
Online retailer Asos has posted a whopping 23 per cent rise in full year pre-tax profit to £54.7m in the year to 31 August. Analysts had expected the company to post a profit of just £44.5 to 54m.
That's not stopped Asos shares dropping on the open though. Shares are now trading about 4.7 per cent below yesterday's close.
Nick Robertson, CEO Asos, says that the company has "reached the milestone of 7m active customers worldwide" and that Asos' "£1bn sales target is now firmly in our sights".
Numis analysts say it's been an "outstanding" year for the retailer, "marked by sequentially accelerating top line growth that leaves the £1bn sales target in sight a year early".
Andrew Wade, Numis, raises their August 2014 profit before tax estimate from £67m to £68.5m, while their August 2015 call is hiked from £86.8m to £89.5m.
Asos gained bonded warehouse status in January and began work on extending its 530,000 square foot site by 140,000 square feet, in order to help provide the storage capacity to exceed its £1bn sales target.
Wayne Brown of Canaccord Genuity says that "new markets are not the only key driver for growth" as UK market growth accelerated to 49 per cent in the fourth financial quarter.
Canaccord Genuity maintains a "Buy" rating on the basis that the retailer's expansion into China and higher levels of investment will drive further growth.
Freddie George, Cantor Fitzgerald, said that Asos' share price of 4,800 to 5,400p in the largest quarter "remains highly rated" at around 90 times forecasted 2014 earnings and 4.6 times anticipated 2014 sales.
George expects the company to hits its earnings and longer term targets, but Cantor Fitzgerald maintains a "Hold" recommendation in light of the stock's rating.