lifted the European benchmark to recover the 6,000. As opposed to the FT 100, the FashionUnited Top 100Index closed in red, but losing less than the previous day (it was down by 1.16 points).
Asos sales jumped 70% to £93.4m in the three months to 31 March as the on-line retailer was buoyed by both the growth in the online shopping market and the success of new websites in the US, Germany and France. International sales surged 161% to £48.4m during the quarter to overtake the UK operation in size for the first time.
"You have to give customers something a bit different... your price has got to be keen and you've got to give them a reason to buy," said Asos chief executive Nick Robertson, who added that annual profits would be at the top of end of analyst expectations of £26m-£29m. The shares closed up 14% at £19.50. Robertson is seeing the online fashion retailer defy the recession thanks to expansion into international markets. International is now up to as much as 52% of group sales, having overtaken the UK business for the first time.
On his own, analyst Nick Bubb of Arden Partners stated their caution on the stock, “based on the simple risk that slowing UK growth would undermine the huge overseas growth and if there was ever a time for ASOS to slow in the UK it would have been in a period in recent months when the UK consumer has clearly been retrenching quickly, but…there is nothing too much wrong with the UK growth of 24% in the period, whilst International saw mind-blowing growth of 161%, as the US and European local websites took off.”
Bubb added that he still thinks the stock is "overvalued at this level". The shares were up 8.9%, by 152p, to £18.59, giving the group a total market cap of about £1.4bn, a hefty multiple on last year's £7m pre-tax profits.
On the other hand, Freddie George at Seymour Pierce confirmed they are retaining their recommendation on the stock with a price target of 1400p since the stock's high valuation, the fact that consumers over the medium term, we believe, are likely to gravitate towards the branded rather than the aggregator websites, so the value in the business will be reliant on how far the company can develop the Asos brand, and the takeover speculation is fully reflected, in their view, in the share price.
At JD Sports, which sells brands such as Adidas and Nike, as well as its own labels McKenzie and Carbrini, annual profits climbed by more than a fifth to £81.6m. However, chairman Peter Cowgill said JD was "extremely cautious" about its prospects for the coming year. Citing higher VAT and rising youth unemployment, he said the retail sector had "recently been significantly impacted by adverse fiscal changes in addition to multiple current economic pressures", adding: "You've got to watch that you don't type up a suicide note in terms of the macro side."