Asos loss narrows despite fall in revenue as new model improves margin

(Alliance News) - Asos PLC on Thursday said its loss narrowed in the first half despite a decline in revenue as it hailed "the strongest sign yet that our new commercial model is working".

The London-based online fashion retailer said its pretax loss narrowed to GBP241.5 million during the 26 weeks ended March 2 from GBP270.0 million a year ago.

Revenue declined 14% to GBP1.30 billion in the first half from GBP1.51 billion. The company said this was a continuation of trends from the previous year due to declines in old inventory and "optimised performance marketing".

The number of active customers fell 16% to 18.0 million from 21.4 million.

Asos said its gross margin improved to 45.1% from 40.0% due to "lower markdown activity and higher full-price mix". Cost of sales fell 21% to GBP712.8 million from GBP903.5 million.

"Total fixed costs held broadly flat in absolute terms, demonstrating strong cost control, effectively offsetting inflation," Asos said.

The company said it faced property-related costs of GBP179.6 million during the period, predominately due to the closure of a fulfilment centre in Atlanta. It faced property-related costs of GBP141.7 million a year ago related to the mothballing of its Lichfield fulfilment centre.

Asos said its full hybrid US model will be in operation from the second half of the year. It expects an annual earnings before interest, tax, depreciation and amortisation benefit between GBP10 million and GBP20 million in the 2026 financial year.

"We continue to closely monitor the evolving US tariff outlook and see opportunity to respond as necessary through improved agility and flexibility of our sourcing and distribution model," Asos said.

The company added that it expects its full-year revenue growth to be at the bottom end of a company-compiled consensus range, estimated between a 2% to 9% decline.

Asos reiterated its full-year profitability forecast for adjusted Ebitda to grow by at least 60% to between GBP130 million and GBP150 million during financial 2025. It expects a gross margin of at least 46%.

Asos swung to a positive adjusted Ebitda of GBP42.5 million in the first half from a loss of GBP16.3 million a year ago.

Chief Executive Officer Jose Antonio Ramos Calamonte said: "[The first half of financial 2025] is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability... Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a 9% [year on year] 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."

Asos shares rose 0.9% to 312.75 pence in London on Thursday morning.

By Olivia Mason-Myhill, Alliance News reporter

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