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ASOS stands out in crowded fast-fashion market
ASOS (ASC:AIM) £53.80
Gain to date: 10.3%
Original entry price: Buy at £48.79, 28 January 2021
Our bullish call on online fashion retailer ASOS (ASC:AIM) is 10.3% in the money and record first-half results (8 April) only boosted our confidence in the web-based company’s long-term global growth potential.
For the six months to 28 February 2021, ASOS’ total sales grew 25% to approaching £2 billion driven by ‘exceptional’ growth in the UK with progress overseas. Adjusted pre-tax profits surged 275% higher to £113 million as youthful fashionistas starved of the opportunity to shop on the high street turned to the web instead.
Admittedly, there was mild disappointment as ASOS increased its full-year expectations only ‘in line’ with the superb first-half performance. A beneficiary of the consumer shifts accelerated by Covid, ASOS left its second-half outlook unchanged, citing the uncertain economic prospects of its core 20-something customer base and with restrictions easing.
Growth may slow now brick and mortar shops are reopening, but the online shift accelerated by the pandemic is here to stay and ASOS is well placed to capture demand for dresses and other going out garments once social life resumes in full.
We were also pleased to learn that the integration of the Topshop, Topman, Miss Selfridge and HIIT brands acquired from the administrators of Philip Green’s collapsed Arcadia empire is ‘progressing to plan’.
SHARES SAYS: Keep buying ASOS for long-term growth.