Online fast fashion retailer ASOS has announced strong final year 2020 results, reporting a 329% increase in before-tax profits and a 19% increase in global retail sales.
The company also reported diluted earnings per share of 125.6p, a 327% increase from 2019, with 18% growth in sales in all regions except the EU, where growth was 22%.
Meanwhile, it reduced its capital expenditure to £115.6m, down from £195m in 2019, while its earnings before interest, taxes, depreciation and amortisation grew from 3.9% in 2019 to 7.4% in 2020.
The final year results come as ASOS has faced an immensely challenging 2020 in light of the coronavirus pandemic, and so is likely to be seen as one of the key ecommerce success stories of the year.
“After a record first half which saw us make progress in addressing the performance issues of the previous financial year, the second half will always be defined by our response to Covid-19,” said Nick Beighton, CEO of ASOS.
“I am proud of the way ASOS met this challenge head on, putting our duty to act as a responsible business at the heart of our approach and working to balance our performance in that context.”
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ASOS rides wave of changing consumer demands to deliver strong 2020 final year results
During the webinar announcing the results, Beighton acknowledged that the company had “lost its way” in 2019, but had renewed its customer engagement efforts in 2020, including through fashion-focused presentations, influencer partnerships and social media-led campaigns.
However, the challenge it faced this year focused around the dramatic change in buying habits that 2020 has presented.
Beighton highlighted that its traditional focus in womenswear – “going out and going out-out” – had given way to a focus on casual and leisurewear during lockdown, with the company selling 5 million units of activewear in 2020.
However, he stressed that the company had still maintained strong sales in its traditional areas, selling 32 million dresses in 2020 – enough to clothe every woman in Britain.
Meanwhile in menswear the focus was on clothes to wear during lockdown remote working, with Beighton estimating that among men, 1% of all global Zoom calls featured at least one person wearing and ASOS brand product.
Commenting on the results, Chris Daly, CEO of the Chartered Institute of Marketing said they were “a rightful reward for swift and difficult decision making earlier this year in coping with the pandemic”.
“As one of the world’s leading online fashion retailers, it is reaping the rewards of building a strong brand built on trust and customer loyalty,” he added.
“The business took difficult customer-facing decisions, in pausing its popular next day delivery service to manage demand and protect its supply chain. ASOS’ decision to handle openly and honestly has served it well, and can be attributed to its strong sales and customer appeal.”
Delivering future growth
While Beighton was celebratory about the end year results for ASOS, he also took the time to lay out the company’s plans beyond 2020.
“During lockdown we committed the time to fundamentally redesign our business plan,” he said.
Promising “a cooler more digitally connected version of our current selves”, he laid out plans to expand the company’s global focus, while increasing the ASOS brand offering, expanding the platform and customer experience and enhancing its sustainability efforts – an area it has come under considerable criticism for in the past.
He insisted the company would continue to be “laser-focused on the fashion-loving 20-something” but said “have to flex our model”.
This is set to include the rollout of ASOS Flexible Fulfilment, which will expand fulfilment options for brands, as well as the establishment of more global hubs to expand already strong localisation efforts.
The company will also launch much-demanded support for customer reviews later this month, as well as increase sharing and consumer interaction functions in its platforms.
Meanwhile it will continue investments in automation at its fulfilment centres, which have already shown “significant improvements” in pick efficiency, particularly at its Eurohub site.
Beighton concluded by warning that while it was not going to be entirely smooth sailing, it was well-positioned to build on its success.
“Short term we see some volatility ahead,” he said. “But we’re well placed to weather the consumer environment and capture the opportunities ahead.”