A strong holiday season and customer initiatives led Asos to gains in sales and revenue, while Repreve recycled yarns and solid global revenues put Unifi over the top.
Asos
In a Nutshell: Asos closed out the last quarter with a surge on record sales for Black Friday and a strong performance in the U.K. in particular.
“Our product has got better and better. We’ve held our prices. We’ve had some great campaigns with face and body and with activewear recently and we’ve driven lots of change that consumers have loved,” said chief executive officer Nick Beighton.
The retailer has increased the number of active customers was up 19 percent and average basket size was up 3 percent. The company is sticking with its full-year forecast of 25 percent to 30 percent growth with gross margin up 100 basis points and EBIT up 4 percent.
Sales: Sales were up 30 percent to £790.4 million ($1.1 billion) in the four months, ended Dec. 31, compared to £605.7 million pounds ($857.0 million) during the prior year period. The company credits the strong results to the U.K. “over performance” and customer acquisition in the region up 10 percent. Asos also stated initiatives like try before you buy and same-day delivery services which rolled out in a couple of U.K. cities resonated with shoppers.
Earnings: Revenue increased 30 percent to £808.4 million ($1.1 billion) compared to £621.3 million ($879.1 million) during the same period the year prior.
CFO’s Take: “I’m pleased to report a strong performance during the period including peak. We achieved an exceptional performance in the U.K., whilst momentum in international sales continued. We acquired 2.6 million active customers year on year and saw encouraging movements across all key customer KPIs,” Beighton said.
Unifi Inc.
In a Nutshell: Unifi Inc., the Greensboro, North Carolina-based manufacturer of synthetic and recycled yarns, saw revenue growth in its second quarter driven Repreve recycled product sales in Asia and North America, together with continued momentum and strong performance in Brazil. The company’s gross margin was 13.5% for the second quarter of fiscal 2018, compared to 14.3% for the year-ago quarter, reflecting a lower-priced sales mix and cost pressures, primarily relating to raw materials.
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Operating income fell to $7.8 million from $9 million year to year, reflecting higher compensation and marketing expenses for expanded commercial efforts. Unifi said based on the most recent results and a rapid increase in raw material costs in connection with a greater than 30 percent hike in petroleum prices since July, it has updated its fiscal 2018 outlook, with revenue growth now expected in the low- to mid-single digit percentage range, driven by volume growth from continued strategic investments.
[Read more about Unifi: Unifi to Recycle 20 Billion Plastic Bottles by 2020, Launches Repreve Sustainability Awards]
Sales: Net sales for the second quarter ended Dec. 24 increased 7.9% to $167.5 million, compared to $155.2 million for the second quarter of fiscal 2017. Revenues from premium value-added products grew more than 20 percent from a year earlier and represented more than 45 percent of consolidated net sales.
Earnings: Net income for the period more than doubled to $11.8 million compared to $4.6 million for the second quarter of fiscal 2017. Unifi said net income benefited from a lower effective tax rate, but was unfavorably impacted by higher administrative expenses. Net income for quarter included a $3.8 million tax benefit due to the reversal of a valuation allowance on certain historical net operating losses, while net income for the second quarter of fiscal 2017 included a loss on sale of business of $1.7 million.
CEO’s Take: Kevin Hall, chairman and chief executive officer, said, “These second quarter results demonstrated strength across our product portfolio. An acceleration in the expansion of our PVA brands, like Reprve, drove PVA revenues to more than 45% of our consolidated net sales. We remain encouraged by the many brands, retailers and mills who have adopted Unifi’s differentiated products, and are finding value in partnering with our recycling, sustainability and innovation efforts. At the same time, we experienced a rapid rise in raw material costs during the quarter, and we are seeking to counter this through appropriate price increases and improved sales mix through the balance of the fiscal year.”