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(Reuters) – LONDON, July 15 (Reuters) – ASOS, an online clothes retailer, reported a 21% increase in sales in the four months ending June 30, but said activity in the last three weeks was more muted as market demand was hurt by COVID-19 uncertainty and bad weather, particularly in the United Kingdom. ASOS (ASOS.L), which offers items for 20-somethings, was down 8.4% at 0713 GMT after the company said it expects trading volatility to continue in the near term due to the quickly developing COVID scenario around the world. As a result, it expected its underlying growth rate for the remainder of the 2020-21 fiscal year to be similar to that of the previous year. Overall adjusted pretax profit for the whole year is still expected to be in line with forecasts. While store-based competitors have had to seal their doors, ASOS has been able to trade through repeated coronavirus lockdowns. In the four months to June 30, total revenue was 1.29 billion pounds ($1.79 billion), up from 1.1 billion pounds in the same time previous year, as the company’s active client base climbed by 1.2 million to 26.1 million. However, due to unfavorable foreign exchange moves, higher freight costs due to global supply chain disruption, and a category product mix being dominated by lockdown leisurewear, gross margin declined 150 basis points. As COVID restrictions lifted, the product mix and return rates began to suggest a shift back into occasion wear in recent weeks, according to the report. Global freight capacity limitations and delivery delays from key areas of supply, it claimed, were driving global supply chain challenges. “While we are aware of the pandemic’s persistent impact on our customers in the short term, we believe the structure of the global e-commerce fashion business has altered forever, resulting in an increase in online fashion sales in the long term,” stated Chief Executive Nick Beighton. Analysts’ average projection for full-year adjusted pretax profit in 2020-21 was 198 million pounds before Thursday’s update, up from 142.1 million pounds in 2019-20. (1 dollar = 0.7220 pounds) James Davey contributed reporting, and Alistair Smout and Kirsten Donovan edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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