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Asos losses narrowed to £69.5m in the first half of the year, down from a loss of £120m the prior year, the “strongest sign” its new commercial model is working, according to the group.
Despite the narrowed losses, sales were down by 13%, driven by continued annualising declines in old inventory, which fell by around 30% year-on-year, as well as optimised performance marketing.
Nonetheless, adjusted EBITDA rose by £58.8m to hit £42.5m, up from a previous loss of EBITDA loss of £16.3m, driven by Asos’ new commercial model, improved stock health and “sustained” cost discipline.
In light of its latest results, the group said that over the last two years it has had a “clear focus on the groundwork required to deliver this”, through restructuring its inventory position and the way it buys fashion through embedding the new commercial model, “comprehensively” refinancing its balance sheet and reducing net debt, while “fundamentally transforming profitability through a relentless focus on operational efficiency”.
Driven by a significant increase in its full-price sales mix, it expects adjusted EBITDA to increase by at least 60% to £130m to £150m for FY25. Revenue growth is expected to be towards the bottom end of its consensus range of -9% to -2%.
Looking ahead to H2, initiatives include launching Topshop.com, a new loyalty program, live shopping features, enhanced search and personalisation, as well as further leveraging AI, including an AI stylist, whilst addressing causes of unnecessary returns.
CEO José Antonio Ramos Calamonte said: “H1 FY25 is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability, with positive adjusted EBITDA up by c.£60m YoY.
“Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a +9% YoY increase in ASOS Design sales in the UK, and positive momentum with our partner brands.”
He added: “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.”
