Asos reports a significant pre-tax loss of £379.3m for the year ending September 1, marking an increase from the previous year’s £296.7m loss.
- Despite the financial setbacks, Asos highlights positive trends with increased full-price sales and a successful inventory reduction strategy.
- CEO José Antonio Ramos Calamonte remains optimistic, citing ‘green shoots’ in the company’s new product performance.
- The retailer achieved an adjusted EBITDA of £80.1m, which is at the upper range of expectations, underscoring strategic progress.
- Looking ahead, Asos plans to enhance its customer experience and expand its model to include more own-brand sales.
Asos has announced a pre-tax loss of £379.3m for the year ending on September 1, which is an increase compared to the £296.7m loss recorded the previous year. This loss comes despite proactive efforts by the company to slash inventory levels and boost full-price sales as part of a focus on ‘sustainable, profitable growth.’
José Antonio Ramos Calamonte, CEO of Asos, expressed cautious optimism by pointing to ‘green shoots’ in the company’s new product performance. He explained that recent stock improvements have bolstered customer confidence in the brand, with a noticeable shift towards offering the right product at the optimal time. This strategy is anticipated to aid in returning the company’s gross margin towards 50% over the medium term.
In terms of financial resilience, Asos has also posted an adjusted EBITDA of £80.1m, achieving the upper range of its projected expectations. This figure indicates a successful execution of the retailer’s turnaround strategy, which involved a comprehensive overhaul of its stock management system. Inventory has been trimmed by 50% since the previous financial year, allowing for fresher stock and increased demand for new products.
During the last quarter, Asos witnessed a 24% year-on-year increase in sales of new products, while efficiently managing aged stock levels, which have been cut by approximately 75%. Over 80% of Asos’ inventory is now composed of items less than six months old, reflecting a strategic push to excite customers with newer product offerings.
Looking ahead, Asos is committed to advancing its ‘Back to Fashion’ initiative by incorporating new brand partners and enhancing customer experiences. The approach includes expanding its test and react model to 20% of own-brand sales and launching a loyalty program alongside a standalone site for Topshop. The company is optimistic about its ability to significantly improve profits in the first half of FY25 and throughout the year, regardless of revenue fluctuations.
Asos remains optimistic about its strategic direction, aiming to improve profitability and customer engagement despite current financial challenges.
