A July trading update from Asos (ASC) announced expectations of healthy full-year profit growth, despite weak consumer sentiment and against a backdrop of growing concerns surrounding the sustainability of clothing production. The retailer is riding a trend towards online shopping and has taken swift action to ensure it can both capitalise on changing consumer behaviour, and survive the coronavirus pandemic.
Sales have recovered since coronavirus outbreak
Strong balance sheet
Improving sustainability credentials
Shoppers are embracing online sales channels
Margins have weakened under shifting product mix
Shares are expensive on an earnings basis