Asos into the red but retailer confident it will bounce back

10th May 2023 | Jack Oliver

Asos saw an adjusted loss before tax of £87.4m for the six months to February 28, but has said that it expects to see its decisions pay dividends in the second half of the financial year.

The online fashion retailer had seen an adjusted profit before tax of £14.8m in the same period last year.

Despite making losses, Asos said it was on track to deliver its full year targets, which includes over £300m of benefits from the retailer’s ‘Driving Change’ action plan, an inventory reduction of around 20% year-on-year, gross margin improvements, and profitability and cash generation in the second half of 2023 and beyond.

The retailer said it has a “robust and flexible” balance sheet with the amendment and extension of a £350m revolving credit facility through to November 2024, which reduces to £220m in August of the same year.

Asos added that it had refreshed its management team, with a newly formed management committee now largely complete.

The retailer’s CEO, José Antonio Ramos Calamonte, said he was “pleased with the strategic and rapid operational progress the business has made in the first half of the financial year”, despite a difficult trading environment.

“We are improving our gross margin run rate in the face of significant headwinds, are starting to see the benefits of a repositioned stock profile, and are taking action to reduce the proportion of our sales which are not profitable. Initiatives are in place to drive a further c.£200m of benefit in the second half and I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond”, he added.


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