Asos looks ahead to profitable growth as it posts full year loss
Asos has reported a full year loss and decline in revenue but insists it has laid the foundations for profitable growth as it continues to implement its turnaround plan.
In the year to 1 September, the fashion retailer saw its adjusted pre-tax loss widen to £126 million from £70.3 million a year earlier as group revenue declined by 16% to £2.9 billion.
Meanwhile, EBITDA fell by 44.4% to £80.1 million in the period as its statutory pre-tax loss came in at £379.3 million compared to £296.7 million a year earlier.
Asos said it had met its targets for its Back to Fashion turnaround strategy with the foundations for more agile and profitable business now in place. A range of initiatives have included completing a large stock clearance programme and embedding a new commercial model as the retailer prioritises profitable growth.
José Antonio Ramos Calamonte, chief executive of Asos, said: “We achieved our key priorities for the year, significantly reducing our inventory position, while generating positive adjusted EBITDA and free cash flow.
“Our product is now in the strongest position it has been in years, with the right level of newness to excite customers, and we have fundamentally improved our profitability through a relentless focus on operational efficiency.”
Asos said it has already seen the green shoots in the performance of its new stock with sales rising by 24% year-on-year over the last three months.
As its new commercial model begins to bear fruit, it expects its current full year adjusted EBITDA to grow by at least 60% to between £130 million and £150 million.
During the year, the retailer will focus on initiatives such as adding brand partners, technology and digital product transformation, introducing a loyalty programme, launching Topshop.com, and further tackling the causes of unnecessary returns.
Calamonte added: “As a result of the significantly higher mix of full-price sales and the decisive actions taken to improve order economics, we are confident in achieving significant profit improvements in H1 FY25 and the full year regardless of revenue levels.
“With these solid foundations in place, we can focus on delivering experiences that delight our 20 million customers.”
