The retailers first-half results were in line with expectations

The retailer's first-half results were in line with expectations

Despite a double-digit decline in profit, weighed down by higher levels of investment, Asos's first-half performance remained in line with expectations. With an upbeat outlook from management, analysts believe long-term confidence will be restored at the online fashion retailer and its reaffirmed full-year guidance will be met.

Hargreaves Lansdown Stockbrokers analyst Keith Bowman:
"In all, Asos remains an enticing but highly volatile and therefore higher risk investment. Ongoing global expansion, aided by current group investment, continues to be weighed against the now established difficulty of correctly valuing internet growth stocks. For now, and with sales growing potentially at the expense of profits, analyst consensus opinion currently points towards a hold."

Investec analyst Alistair Davies:
"Interim results are ahead of expectations due to disciplined marketing spend and improved performance in delivery and third party income. Management has reaffirmed guidance for the year ahead and sales expectations are likely to be towards the upper end of the range, with Q2 trading momentum giving confidence this can be achieved (at least)."

"The long-term story in our view remains one of continual investment suppressing margins; in the absence of material revenue outperformance, this leaves the shares overvalued."

Bernstein analyst Jamie Merriman:
"While today's result is better than expected, management reiterated that they expect full-year profit to be in line with consensus expectations, suggesting this improvement will be reinvested in H2. Asos continue to execute on the plan laid out last year, with good progress on zonal pricing, building out distribution capabilities in Europe and the US, and in continuing to drive customer acquisition."

N+1 Singer Equity Research analyst Matthew McEachran:
"Interim profit before tax is in line with expectations at -10% including insurance income or -41% treating the GBP6.3m (US$9.3m) as exceptional against a comp that was itself -22%. However, there was significant margin invested in price, which is resulting in improving customer metrics, and warehousing costs should improve from H2. Forecasts require a significant improvement in sales, margins and CTS percentage, both in H2 and especially next year. Performance thus far is in line with FY expectations, though, and management’s outlook suggests confidence in the long term is being restored."