UK's online fashion retailer ASOS Plc (ASC.L,ASOMF.PK,ASOMY.PK) reported Tuesday a decline in profit for fiscal 2014, despite significant growth in revenues. Looking ahead, the company sees flat profit next year. Separately, the company said it has appointed Chief Financial Officer Nick Beighton as its Chief Operating Officer. The shares were gaining around 13 percent in the early morning trading in London.
For fiscal 2014, pre-tax profit declined 14 percent to 46.90 million pounds from last year's 54.67 million pounds.
Earnings per share dropped 10 percent to 44.5 pence from 49.2 pence a year ago.
According to the firm, significant incremental costs related to investment in warehousing and the launch of new business in China, along with the strengthening of the pound and the fire at Barnsley warehouse in June all combined to reduce profits. The challenging trading environment added to the woes.
Group revenues, however, climbed 27 percent to 975.47 million pounds from prior year's 769.40 million pounds. UK retail sales climbed 35 percent, and international retail sales grew 22 percent.
In the year, gross profit grew 22 percent, while gross margin dropped 210 basis points to 49.7 percent, and retail gross margin dropped 210 basis points to 48.7 percent.
As of August 31, the company had 8.8 million active customers, 25 percent higher than the prior year.
Looking ahead, the company said that during the year ahead, it intends to make significant investments in international pricing and proposition, as well as continuing to invest in logistics infrastructure and technology platforms.
"We therefore expect profit for the next financial year to be similar to this year, with the new financial year representing a continuation of our medium-term build phase, to provide the platform to reach our next staging post of £2.5bn sales," the company said in its statement.
Separately, ASOS announced that Nick Beighton, Chief Financial Officer, would become Chief Operating Officer with immediate effect. In his new role, Beighton will add responsibility for retail and international to his existing responsibilities for finance, IT, supply chain and logistics.
The company further said it has started a search for a new Chief Financial Officer.
Beighton's expanded role will free up Chief Executive Officer Nick Robertson to focus on the company's growth strategy, customer experience and marketing.
ASOS added that a further announcement will be made in due course.
In London, ASOS shares were gaining 13.17 percent, and trading at 2,200 pence.
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