Asos maintains profit guidance despite HY sales falling 18%

Asos has reported that sales fell by 18% during the half-year period to 3 March, which the   online retailer maintained is still broadly in line with expectations. 

According to the group, it expected FY23 trends to continue through to the first half of FY24, as it worked to improve core profitability under the Drive Change agenda and as Asos “right-sized” stock levels.  

As a result, it said its full-year guidance remains unchanged and includes a 5% to 15% sales decline, positive adjusted EBITDA, inventory back to pre-pandemic levels, a positive cash generation, and a reduction in net debt. 

Despite the sales decline, Asos’ cash flow improved by roughly £240m year-on-year. The group’s H1 free cash flow of £20m is also its strongest performing half-year cash performance since FY17. 

Asos said it has also made “good” progress on implementing the Back to Fashion strategy, including action to clear old stock and transition to the new operating model by FY25. 

Asos ended H1 FY24 with a “robust” cash balance of more than £330m, spelling an improvement of more than £20m from H1 FY23. 

José Antonio Ramos Calamonte, CEO of ASOS, said: “ASOS is becoming a faster and more agile business, aided by the incredible work of our teams to speed up all of our processes to deliver the fashion, quality and prices that our customers want, when they want it. 

“I’m excited by the performance of our new collections, while we have also made great progress in monetising inventory that built up over the pandemic and in improving the core profitability of our operations.” 

He added: “We have reconfirmed our guidance for FY24 as we lay the foundations for a more profitable, cash generative business from FY25 and beyond.”