ASOS suffers drop in first half profit
Online fashion retailer ASOS has seen a drop in first half profits after supply chain constraints impacted stock availability.
In the six months to 28 February, adjusted pre-tax profit declined by 87% to £14.8 million although revenue increased by 4% at constant currency to over £2 billion.
Revenue in the UK and US was up 8% and 11% respectively in the period. However, trading in the EU was more subdued with growth of 1% as Covid-19 restrictions impacted demand. Meanwhile sales in the rest of the world fell by 10% as delivery challenges continued.
Despite the supply chain issues, ASOS said it performed well operationally in the period with its second half stock position materially enhanced.
It also reported making good progress with its new strategy which is focused on driving a more customer-centric organisation, accelerating the pace of delivery across the commercial function, and increasing the emphasis on data and digital product.
Mat Dunn, Asos chief operating and chief financial officer, said: “ASOS has delivered an encouraging trading performance, against the continuing backdrop of significant volatility and disruption. The team has acted with determination and pace and is making good early progress on the strategic plan for the next phase of growth, as set out at our CMD last year.
“While much remains to be done, we have a clear plan for each of the three key pillars – our platform, consumer offer, and international expansion – and are already seeing positive signs of progress across the business. We’re confident of the benefits these efforts will create and our continued ability to deliver.”
Looking ahead to it full year, ASOS said its guidance remains unchanged except for the loss of business in Russia following its decision to suspend sales in the country.
Dunn added: “We’ve entered the second half of the year well placed, and believe that our stock position, with increased product availability and newness, will stand us in good stead. We remain mindful of the potential impact on demand from the growing pressures on consumer spend and will continue to be responsive to any changes in market conditions as we progress the work started in the first half to deliver on our ambitions.”
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