ASOS has traded well in the 4 month period ended June with Retail sales growth of 20% (as expected) accompanied by a healthy recovery of 280bps in the gross margin against last year’s soft comps. Combined Retail GP for the year therefore looks to be running ahead of expectations by c£10m. This has been reinvested back into the business. Although this may limit any forecast upgrades to low-enders the newfound momentum in the business is well received and we have reviewed our target price to 3620p using a target 30x Aug’16 EV/EBITDA multiple.
