Broker snap: ASOS may be losing UK customers

30th Sep 2009 11:28

The premium rating of online shopping firm ASOS requires earnings estimates upgrades, in the view of Charles Stanley, and Wednesday's AGM statement will not prompt analysts to bump up their forecasts, the broker reckons.'The slowing group sales growth trend (+47% for last 6 months, down sequentially from the 52% reported at the first 13 weeks stage, and the 80% at the first 4 weeks stage) implies, given the International sales growth momentum, that the UK sales growth has slowed to around the 25% level,' Charles Stanley analyst Peter Smedley speculates, adding that increased competition and reduced disposable income among its core 16 to 34 year old clientele may be taking its toll.'We also note that the number of active customers (defined as having shopped within the past 6 months) has remained static at 1.2 million i.e. the same as reported in January 2009. If we were to assume that ASOS has had considerable success in gaining new customers in international countries (which has in turn been the principal driver of recent group sales growth) then the number of UK-based active customers has reduced in recent months, which hints at the some of the key issues facing ASOS in the UK,' Smedley concludes.