Asos ups profit outlook amid strong margin gains
This comes after the company’s share price surged following news that its largest shareholder, Anders Holch Povlsen, increased his stake to just under 30%, a level that would trigger a mandatory takeover offer
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Asos has raised its profit outlook for the first half of the year despite its ongoing struggles with volume deleverage.
The company stated that it expects a “significant” increase in profitability after it saw strong gross margin growth driven by lower markdown activity, an increased full-price mix, and continued cost discipline.
The online fashion company has projected total sales growth of 13% with an adjusted EBITDA of £34m and an adjusted EBITDA margin of 2.6%.
With its first half year results set to be published next month, it also confirmed that its revenue growth is set to align with analyst expectations.
The brand stated: “Encouragingly Asos own brand full-price sales, a core engine of its customer proposition, returned to growth in the first half. This was enabled by its market-leading test and react model, now more than 15% of own-brand sales and growing, ensuring ASOS can offer the most exciting product and set the trends for its fashion-loving customers.”
This comes after the company’s share price surged following news that its largest shareholder, Anders Holch Povlsen, increased his stake to just under 30%, a level that would trigger a mandatory takeover offer.
The move has led to speculation that he may be positioning himself to take the online fashion giant private in a bid to revive it.
Last month, the business appointed its first managing director as part of a series of organisational changes aimed at aligning its structure with its growth strategy and customer-first approach.
