ASOS shares jump on profit guidance upgrade

(Sharecast News) - Shares in ASOS jumped on Thursday after the online fashion retailer said full-year profits were set to come in towards the upper end of guidance, while sales returned to growth in the fourth quarter.

The stock was up 6.3% at 457p by 0933 BST, having earlier touched a 52-week high of 465.5p.

ASOS said adjusted EBITDA for the year ended 30 August was expected to be above the midpoint of its £150m to £180m guidance range, having risen by more than 25% year-on-year.

Adjusted gross margin was more than 50%, beating its previous 48% to 50% guidance, helped by improved sourcing, better full-price sell-through and the expansion of its flexible fulfilment model.

Gross merchandise value returned to growth in the fourth quarter, rising at a low-single-digit rate following sequential improvement throughout the year. Full-year GMV was still down 5%, although the UK and Germany returned to growth in the second half and the US grew in the fourth quarter.

GMV in womenswear, a "priority category" for the retailer, increased 3% over the year and 8% in the second half.

Chief executive José Antonio Ramos Calamonte said: "Through consistent delivery over recent years, we have strengthened our balance sheet, materially improved profitability and reached an inflection point in our Q4 active customer base, driven by new customer acquisition. These actions have laid the foundations for a return to GMV growth in Q4."

Net debt fell to around £110m from £184.7m a year earlier, helped by roughly £116m of proceeds from the sale of its Lichfield and Atlanta warehouses.

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