ASOS stock prices rebound despite fall in profits

Things are looking better for British online fashion retailer ASOS. After a tough year in which the company suffered from a fire at its warehouse (which interrupted trading) while strong pound hits overseas sales, leaving the company with unwanted stock to clear at low prices, shares have slumped from a peak of 70.50 pounds in March this year.

The company’s shares soared 16% to 22.60 pounds yesterday, even as it delivered a 14% fall in profits for the year to 31 August. Revenue had grown 27 percent to roughly $1.5 billion, with UK retail sales up 35 percent and international sales up 22 percent.

Chief executive Nick Robertson said in a statement: "Despite all that happened this year, we still delivered 27% growth in sales, with the UK a standout performance at 35% growth." Robertson also said said that the hit to profits was necessary to build a global business and investors should keep their eyes on that “very big prize”. He added: “We are in a period of major investment that comes at a short term cost, but the medium-term benefits will be significant.

According to a recent report by Reuters ASOS believes it can reach its target of 2.5 billion pounds ($4 billion) in annual sales by 2020, with price cuts helping to reignite growth after three profit warnings this year. Robertson also swept aside rumours that the online fashion retailer is about to be swallowed by Amazon, declaring the internet company was not his “dream partner”.