Asos Plc, the U.K.’s largest online-only fashion retailer, said sales growth accelerated in the third quarter on gains in its home market, where it recently started selling items from the Primark budget clothing chain.
A 45 percent gain in total retail sales to 193.6 million pounds ($303 million) exceeded the prior quarter’s 37 percent growth and analyst estimates of about 43 percent.
U.K. sales rose 39 percent in the three months ended May 31, Asos said today in a statement, compared with an 8 percent gain in the same period last year. Growth at home has been trailing the company’s international division as Asos has added businesses from the U.S. to Australia and Germany. International sales now account for about two-thirds of the total.
“One has to admire the Asos team, a phenomenal model and first-rate execution,” David Reynolds, an analyst at Jefferies International Ltd., said in an e-mail. “The company is well on the way to delivering on consensus expectations for 2013.”
Asos rose as much as 4.5 percent in London trading and was up 3.5 percent at 4,122 pence as of 9:25 a.m. The stock has risen 53 percent this year after more than doubling in 2012.
The U.K. business has “a bit of momentum” behind it, Chief Executive Officer Nick Robertson said by phone.
Asos this month started selling a “small selection” of Primark’s most fashion-led pieces, cementing the website’s place as a fashion destination for a target audience of men and women in their twenties. Primark, owned by Associated British Foods Plc, is one of the U.K.’s fastest-growing retail brands as shoppers have latched onto its low prices and trendy designs.
The addition of Primark is “just a trial,” Robertson said by phone. Asos has about 70 Primark products on its web site, with plans for about twice that, he said.
The online retailer sells both own-label and branded clothing in 241 markets globally and is outpacing the retail market with a focus on fast delivery, in-country websites and marketing teams, and regularly updated fashions.
International retail sales rose 48 percent to 129.3 million pounds in the quarter, the company said.
Asos’s Russian country-specific website, which started up in May, has gone well, Robertson said, without giving details. China, which is planned for October, is on track, he said.
Retail gross margins, a measure of profitability, widened by 0.1 percentage point in the quarter and the London-based company said it sees further gains this year, after a decline of 0.6 percentage point in the first half.
“We remain positive in our outlook for the year to Aug. 31, 2013 and expect our full-year results to be in line with expectations,” Robertson said in the statement.