The largest online-only fashion retailer Asos Plc reported on its annual profit, which surprised analysts estimates. Shares of the company surged the most since late August during the London trading session, following the announcement.
Jamie Merriman and Noelle Guo, analysts at Sanford C. Bernstein Ltd, commented in a report, cited by Bloomberg: “Investors will be encouraged by these results,” after the company stuck to a medium-term revenue target and “suggested good progress on operational initiatives.”
The company also projected that it could accomplish the annual sales target of £2.5 billion ($4 billion) by 2020. Asos shares, which had lost about two-thirds of their value in 2014 after a series of difficulties, now increased by 19%, indicating that the companys business is becoming more stable. The Chief Executive Officer of the company, Nick Robertson, said at the end of August that the investments, which affected Asos results, were to be significantly beneficial in the medium term.
The U.K.-based online-only retailer reported that its pre-tax profit during the fiscal year that ended in August declined by 14% to £46.9 million. This result surpassed the initial analysts forecasts of a £44.9-million pre-tax profit. Asos said its international sales growth declined by one half from the 44-percent growth reported a year ago, to the rate of 22%.
Asos CEO said in the companys statement, cited by Bloomberg: “We are in a period of major investment that comes at a short-term cost” to bring about the mid-term gain.
Asos also stated its forecasts regarding the next fiscal years profits, as it expects the profits to be “similar” due to “significant investments”, which are being made by the company in international pricing, warehousing and technology infrastructure.
Asos Plc added 14.61% to trade at GBX 2 228 per share by 13:36 GMT, while marking a one-year decrease of 58.64%. The company is valued at £1.62 billion. According to the Financial Times, the 20 analysts offering 12 month price targets for Asos Plc have a median target of GBX 2 500, with a high estimate of GBX 5 000 and a low estimate of GBX 1 440. The median estimate represents a 28.60% increase from the last price of GBX 1 944.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
