Online fashion retailer Asos has jumped more than 5% after it pleased investors with a better than expected update.
The company said third quarter retail sales rose 45% to £194m, with the UK up 39% and its international business 48% better. It has seen strong growth in areas such as the US, France, Germany and Australia where it has a dedicated website and local teams. Its expansion overseas continued with the launch of a Russian website early last month.
Its recent tie up with Primark has seen "phenomenal" demand in the first week of its trial, the company said. Bethany Hocking at Investec said:
Results were better than (bullish) expectations, and the very strong UK growth shows that even in its most "mature" markets Asos continues to have substantial opportunities. Key performance indicators (basket size, value, frequency) are all showing progress, although the former does have some impact on costs. As we have previously discussed, the opening of new warehouses in 2016/17 should drive a significant increase in operating margin, another share price catalyst. We update forecasts and our target price moves to £48 [from £39]. On a five year view, we see £70 as eminently possible.
