Asos losses widen, sales fall in first half
[Araki Illustrations - www.stock.asobe.com]
Half-year losses at UK online fast-fashion retailer have widened as it continued to deal with competition from Chinese rival Shein and a mountain of excess stock.
The company on Wednesday reported an adjusted loss before tax of £120m for the 26 weeks to March 3, compared with a loss of £87.4m a year earlier. Adjusted core earnings swung to a £16.3m loss from a £4.6m profit a year ago.
Asos also named former Sainsburys and Amazon executive Dave Murray as its new chief financial officer, saying that his retail and e-commerce experience would help return the group to profitability.
Like-for-like sales fell 18% on an adjusted basis in the first half and the group said underlying earnings in the 2024-25 financial year are set to be "significantly" higher than the previous two years as it cuts costs and slashes stock levels.
Asos blamed the sales drop on overhaul efforts, having cut its stock intake by about 30% year-on-year to "right size" stock levels and also clearing a backlog of old items.
It said it was ahead of plans to reduce stock and is aiming for further clearance sales over the final six months of the financial year.
The company held guidance for positive adjusted earnings before interest, taxes, depreciation, and amortisation on sales expected to be 5 to 15% lower.
"Asos is becoming a faster and more agile business, and we are reiterating our guidance for the full year as we lay the foundations for sustainably profitable growth in full-year 2025 and beyond," said chief executive José Antonio Ramos Calamonte.
"At the beginning of this year we explained that 2023-24 would be a year of continued transformation for Asos as we take the necessary actions to deliver a more profitable and cash generative business."
"Our progress over the last six months means we can feel confident that from 2024-25 we'll have the right level of newness to excite our customers again."
Reporting by Frank Prenesti for Sharecast.com
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.