The shares of Asos (LSE: ASC) dropped 5% to 5,144p this morning after Britain’s most celebrated online retailing success story reported annual results in line with analysts’ growth expectations.
The company — which once stood for As Seen on Screen — delivered 40% growth in retail sales to £753m, with pre-tax profits up 37% to £55m.
Asos shares have enjoyed an extraordinary expansion in the past ten years, climbing from 4 pence to over £50 per share since 2003. A £1,000 investment in the fashion clothing specialist a decade ago would now be worth an incredible £1,286,000.
Today, however, investors took profits and ‘sold the news’, as Asos’ growth fell in line with market expectations.
Commenting on the results, Asos chief executive Nick Robertson added:
“We reached the milestone of 7 million active customers worldwide, following significant investment in our product offer, delivery options, customer experience and marketing. We also successfully launched our dedicated website in Russia during May 2013 and will soon launch our China operation.
We have started the new financial year positively. Our £1 billion sales target is now firmly in our sights and we have stepped up our investment in people, technology, logistics and marketing to support the significant global potential of the ASOS business.”
With a market cap of £4.3bn, Asos shares trade at 85 times their expected 2014 earnings, and offer no dividend.
