A commentary from Nicky Stewart, the Director of Institutional Marketing at Edison Group with 25 years of equities experience, on the main takeaways from Asos’ and Hotel Chocolat’s interim reports.
Q4 2019 hedge fund letters, conferences and more
“ASOS (ASC LN/£2.9bn/3,348p +10.7%) has had an encouraging start to the year with retail sales for the first four months to December up 20% to £1,075m (Q119: £895m). Total group revenue was £1,106m, 19% ahead of consensus at £930m. Growth was strong across all regions, reflecting a record Black Friday and strong customer engagement activity throughout the period. Gross margin, however, was down 170bps due to US duty and investment in customer acquisition as planned. Management has stated plans and outlook for the year remain unchanged as focus continues to be on the actions required to support long-term growth and the retention of customers recently acquired.
Asos and Hotel Chocolat
“Hotel Chocolat (HOTC LN/£494m/432p +1%) announced that total group revenue increased by 14% for the 26 week period ended 29 December. The group opened nine new locations in the UK, ending with 125 locations, as well as 2 new locations in the US and three new joint-venture locations in Japan. Angus Thirwell, CEO, commented on the launch of Nutmilk in the period, stating; “We also launched Nutmilk, our outrageously creamy new ‘milk’ chocolate which just happens to be 100% vegan. It’s been five years in the making and is an immediate hit.” 2020 will see the group accelerate its supply-chain transformation and will focus on rebalancing from being a UK-based company operating from owned channels, to one more suitable for multi-channel multi-territory international supply.”
