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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.
