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Asos Growth Slows as Weak Australian Dollar Stunts Gains

Asos Plc, (ASC) the U.K.’s largest Internet-only clothing retailer, reported slowing sales growth as the weakness of the Australian dollar stunted gains in one of the company’s main international markets.

Sales rose 38 percent to 335.7 million pounds ($551 million) in the four months through December, the London-based retailer said today in a statement, weakening from 47 percent growth in the previous three months.

The Australian dollar weakened, on average, about 11 percent against sterling in the final four months of 2013, making Asos’s clothes more expensive for customers. Prices in Australia were 13 percent to 15 percent higher, causing, Chief Executive Officer Nick Robertson said by phone, weighing on sales growth. Still, overall business was in line with the company’s expectations, with the U.K. particularly strong, he said.

“Some people will be fretting about the overseas slowdown,” Nick Bubb, an independent retailing analyst in London, said in a note.

Asos shares fell 1.5 percent to 6,760 pence at 8:55 a.m. in London, trimming their gain this year to 10 percent. Asos’s stock has risen more than fivefold since the end of 2011 amid buoyant demand for its online fashions at home and abroad.

Robertson said he’s comfortable with analyst estimates for full-year pretax profit of about 71 million pounds, which would represent growth of about 30 percent on the prior year.

Asos gets about 60 percent of sales from its international division, where sales rose 38 percent in the four-month period, slowing from the previous quarter’s 47 percent growth. Australia is part of the rest of the world region, where growth weakened to 19 percent from 26 percent.

The company will open a new central European distribution center later this year, Robertson said, declining to give more details. Asos is boosting capacity internationally to capitalize on a rapidly growing customer base.

The number of active customers was 7.9 million as of Dec. 31, up 41 percent from a year earlier, the company said today.

To contact the reporter on this story: Paul Jarvis in London at pjarvis@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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