UK online fashion retailer ASOS said its potential was "huge" as it narrowly beat forecasts with a 28% jump in 2017-18 profit and maintained guidance for its new financial year and beyond. 

Listed on London's junior AIM market, ASOS shares have fallen 26% this year.

They fell sharply in July after the firm missed analysts' forecasts for third quarter sales growth. 

ASOS said it had reined in marketing as it focused on ramping up warehouse space in Germany and the US. 

But the firm, which sells fashion aimed at twentysomethings, today hit its sales growth forecasts for the year and said it was confident about its prospects, sending its shares up around 12% at the open. 

"ASOS is moving fast and is as differentiated as ever. The potential for our business is huge," the company's chief executive Nick Beighton said. 

It made a pretax profit of £102m in the year to August 31 - just ahead of analysts' average forecast of £101m and up from £80m in 2016-17. 

ASOS said its retail sales rose 26% to £2.36 billion, with growth of 23% in the UK and 27%overseas. Active customers increased 19%. 

While ASOS and online peer Boohoo continue to report robust sales growth, Britain's traditional clothing retailers such as Marks & Spencer, Debenhams and House of Fraser are closing stores.

ASOS forecast sales growth of 20-25% for the 2018-19 year and said it expected to grow at that rate for the medium term, with annual capital expenditure of £230-250m.