Asos has cemented its position as a lockdown winner after posting surging profits and sales for its full year, but the online fashion retailer sounded a cautious note on consumer demand.
Pre-tax profits jumped by 330pc to £142m for the year to August on revenues almost a fifth higher at £3.26bn.
The fast fashion business reported strong demand during the pandemic and forecast further improvement this financial year.
Asos was boosted by bored millennials buying clothes online during lockdown despite having their social lives restricted due to the crisis.
While the Aim-listed firm said it had made a “solid” start to the new financial year, it cautioned on the outlook for consumer demand while the economic prospects and lifestyles of its twentysomething target market remains disrupted.
Shares fell 6.3pc in early trading to £50.40 but remain considerably higher than their £33 value at the start of the year.
Chief executive Nick Beighton said: “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.
“As well as protecting staff, suppliers and customers, we’ve driven efficiency and have emerged a stronger, more resilient and agile business whilst delivering strong profit and cash generation.”
Asos said its customer base rose by 3.1m to 23.4m during the period.
In August, the retailer demanded greater transparency from the brands whose clothes it stocks in the wake of a “sweatshop” scandal that engulfed the fashion industry during the summer.
The company is asking its partners for a pledge to make their manufacturing sites public, to ensure they know who all their suppliers are and share details of any supply chain risks with Asos.
Analysts at Peel Hunt said: “Estimates of ‘Covid-19 tailwind profits’ are likely to keep a lid on enthusiasm, and the shares have run well into the results, which may mean a muted performance on the day.”