Asos shares (LON: ASC) are trading 9% lower despite the 329% surge in pre-tax profits amid the pandemic.
The online fashion retailer added a further 3.1 million customers, taking the total to 23.4 million.
Sales as Asos surged to £3.3bn, increasing by 19% in the year to 31 August thanks to the demand for skincare products and leisurewear.
“The normal pattern of social events is not going to resume in the short term so whilst we have confidence in our ability to continue growing our market share globally, we are cognisant of the economic impact this crisis is having on our 20-something customers and the pressure on their disposable incomes,” said Asos in a trading update.
Despite the strong trading over the past year, Asos shares fell almost 10% over Wednesday as investors worried about tougher trading conditions over the rest of the year.
Investment analyst at Hargreaves Lansdown, Susannah Streeter, said: “A depressed economic outlook may push down demand to refresh wardrobes.
“With venues forced to close at 10pm and the Christmas party season cancelled, profits from party wear will be thin. Job prospects are uncertain for its core group of customers in their 20s and so the company will have to be very choosy about the ranges and prices it offers.”
The group’s chief executive, Nick Beighton, commented: “After a record first half which saw us make progress in addressing the performance issues of the previous financial year, the second half will always be defined by our response to Covid-19. I am proud of the way ASOS met this challenge head on, putting our duty to act as a responsible business at the heart of our approach and working to balance our performance in that context. As well as protecting staff, suppliers and customers, we’ve driven efficiency and have emerged a stronger, more resilient and agile business whilst delivering strong profit and cash generation.
“I am pleased by the improvements we have made this year but there is still more for us to do to continue our progress. Whilst life for our 20-something customers is unlikely to return to normal for quite some time, ASOS will continue to engage, respond and adapt as one of the few truly global leaders in online fashion retail,” he added.