ASOS (AIM:ASOS) – positive update has the short sellers scampering for cover
The highly valued online retailer has issued a reassuring update. For the 3 months to 28 February 2015 retail sales grew by +19% (+22% on a constant currency basis), with strong growth continuing in the UK at +30%. They have also seen encouraging momentum in international markets during the quarter at +12% (+16% on a constant currency basis) following the successful roll out of ‘zonal pricing capability’ and planned price investments. However, the margin decline is clearly a concern.
The Group’s investments in warehouse and IT platforms are on track with profit before tax for the full year is anticipated to be in line with market expectations. Consensus estimates are for pre-tax profit of £45.05m and eps of 41.38p putting the shares on a crazy rating of 92x forecast current year earnings. Online rival boohoo.com, who we have also commented on, looks significantly better value given given its growth profile, although is also highly rated. With retail sales having previously being running at 15% growth, today’s news of a move back up to 20% is clearly positive though surely…