Asos has reported sinking sales as it continued to clear a build-up of stock and slash the number of discounted items, but revealed its turnaround efforts were starting to bear fruit.
The online fashion retailer said the first half of its financial year was the “strongest sign yet” that its overhaul of the business was working.
It nonetheless reported revenues of £1.3 billion for the six months to March 2, declining 14% compared with the same period last year.
It also warned that revenues were expected to come in at the “bottom end” of its guidance range for the full year, which means revenues could drop by as much as 9%.
Asos has been battling to clear a £1.1 billion stock mountain since 2022.
It said stock levels were down about 60% since then, with about 80% of fashion items on the platform less than six months old.
The group has been turning its attention to selling full-price products, rather than those on sale, which it said generates more profit.
This has seen the average value of people’s baskets rise by 4%, it revealed.
Asos’s own-brand products, sold at full-price, returned to growth during the period, while sales of its Asos Design range jumped by nearly a 10th in the UK.
The group narrowed its pre-tax losses to £241.5 million for the half-year, from £246.8 million a year ago.
On an adjusted basis, earnings before interest, taxes, depreciation and amortisation (EBITDA) swung to a £42.5 million profit, from a £16.3 million loss the prior year.
Jose Antonio Ramos Calamonte, Asos’s chief executive, said its customers were “responding positively to our focus on full-price sales, speed to market, and quality” and that it had seen “positive momentum with our partner brands”.
“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.”
Source: independent.co.uk
