International sales push ASOS to new heights

As ASOS' share price rises over 6% in early morning trading, Nick Raynor, investment adviser at The Share Centre, explains why this online retailer remains a buy for investors.

"This rags to riches story started in 2003 when the share price began trading at just 3p. Thanks to the internet and an increasing desire by the youth of today to dress like their idols, the share price has soared and these results suggest there is more to come.

"ASOS has performed far better than expected as year-on-year sales increased 70% in Q4. The UK market has been the retailers' core sales area in the past; however international sales were its main strength in these figures as revenue grew by a whopping 161% to £48.4m.

"European sales increased 77% to £21.3m, US sales grew by 222% to £7.1m and in the rest of the world, sales rose by a massive 367% to £20m. Although the UK high street is struggling, with its online only presence ASOS has remained stable with a 24% increase in revenue to £44.9m.

"It is worth investors keeping an eye out for any bid news to come from Danish fashion retailer Bestseller - it has recently increased its stake in ASOS to 20% and a takeover could see the share price move even higher during 2011.

"Since we first recommended ASOS as a ‘buy' in June 2010 the share price has risen from £7 to £18. We feel its international expansion, coupled with the fact it is in the almost unique position of having no debt and rising levels of cash in the bank, makes ASOS a strong ‘buy' for investors seeking growth."