Asos improves profitability despite sales fall
Asos has seen a significant improvement in first half adjusted EBIDTA which swung to £42.5 million from £16.3 million a year earlier as its new commercial model begins to deliver results.
The online fashion retailer has also reported a narrowed pre-tax loss which came in at £241.5 million in the six months to 2 March compared to a previous loss of £270 million.
Asos said its sales trajectory developed as expected with adjusted group revenue falling by 13% to £1.291 billion in the period, driven by annualising declines in old inventory and optimised performance marketing.
Meanwhile, gross margin was up c.500bps which the retailer attributed to lower markdown activity and higher full-price mix.
Over the last two years, Asos has been working to transform its business through a restructuring of its inventory position, the way it buys fashion, and a “relentless” focus on operational efficiency.
Commenting on the half year performance, Asos chief executive José Antonio Ramos Calamonte said: “H1 FY25 is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability, with positive adjusted EBITDA up by c.£60m YoY.
“Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a +9% YoY increase in ASOS Design sales in the UK, and positive momentum with our partner brands.
“Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health. We look forward to a fantastic pipeline of new products, brands and customer experiences, and remain confident in our ability to deliver sustainable, profitable growth.”
