Susannah Streeter, senior investment and markets analyst. Hargreaves Lansdown

‘’ASOS has strutted ahead in terms of sales in the UK, thanks to high demand for the latest styles as partygoers geared up for a season of celebrating, with growth for this market coming in ahead of expectations. Finally it seems dresses and sequins replaced slouchy loungewear styles as long delayed parties were planned. Bringing Top Shop into its rail of brands is paying off, having scooped it from the Arcadia bargain bin. Sales shot up by 200% proving there is still a lot of love around for the label among fashion conscious fans.

But it’s not helped boost its profit guidance as elsewhere the group facing ongoing headwinds, constraining growth. Supply chain challenges continue to be an ongoing headache for the group and overall demand has still stayed extremely volatile due to fresh waves of Covid crashing on key markets.  Margin declines due to discounting were expected and that is likely to continue to be a niggling cause of concern as too many red ticket reductions have been turned into a big headache in the past.

Investors appear confident that ASOS is taking the right strategy to ride out the storm with the growth trajectory of 10-15% unchanged for the year and pre-tax profits remaining on track.  They have been buoyed by the news that ASOS is styling itself for a premium listing and plans to apply for entry to the main market of the London Stock Exchange, moving out of the AIM index. With a market capitalisation of £2.4 billion, approval should mean it would move into the FTSE 250 during a period after listing. This would see it included in fund purchases for index trackers which aim to mirror the performance of the index.

The last year has been a rollercoaster ride for ASOS, originally shorthand for As Seen On Screen, and it’s hoped an admission will help erase some of the volatility of the stock and push it further into the limelight in terms of profile among investors.''

Shares were up 11% in early trading.