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Online retailer Asos has announced that it has returned to profitability after its EBIT rose more than £20m year on year for the three months ended 31 May.
This earnings increase comes despite its revenue dropping 11% from £964m down to £859m in the same period.
The company stated that this reflected its deliberate actions on capital allocation to improve profitability showing around £200m of profit optimisation and cost savings.
Sales in the UK were down from £432m in 2022 to £370m in 2023, a decline of 14%.
Asos now believes that it is on-track to deliver its adjusted EBIT guidance of between £40-60m in H2 FY23.
José Antonio Ramos Calamonte, CEO, said: “We continue to focus on making ASOS the best possible destination for our fashion-loving customers. At the same time, we are delivering on our plan to turn the business around: to right-size our stock; to generate cash; to reduce our net debt; and to structurally improve our profitability.
“I am confident in the direction we are going, we have restored profitability in the period and made good progress in clearing through our inventory to generate cash. We retain an ample balance sheet flexibility and reiterate our expectations for improved profitability, cash generation and reduction in net debt in H2 FY23 and beyond.”
