“At the beginning of this year, we explained that FY24 would be a year of continued transformation for Asos as we take the necessary actions to deliver a more profitable and cash generative business. Under our Back to Fashion strategy, we set out three priorities for the year – to offer the best and most relevant product, to strengthen our relationship with customers and to reduce our cost to serve. We have delivered on each of these in the first half of the year, including right-sizing our stock ahead of target to drive our best first half cash performance since 2017 and seeing excellent results in our Test & React model, which is growing at pace”, commented José Antonio Ramos Calamonte, Chief Executive Officer.

First Half Results

In the 26 weeks to the 3^rd of March, Asos recorded an adjusted loss before tax of 120.0 million British pounds (139.6 million euros), as compared to an adjusted loss before tax of 98.1 million British pounds (114.1 million euros) in the same period of last fiscal year. Adjusted EBITDA also deteriorated from a profit of 4.6 million British pounds (5.35 million euros) in a similar period of the previous year to a loss of 16.3 million British pounds (19.0 million euros).

The company said this was due to sales being “impacted by continued challenges in the market backdrop, including higher cost-of-living pressures and the impact of profit initiatives taken in FY23 under our Driving Change agenda”. As previously announced, its first half revenue fell by 18% year-on-year to 1.55 billion British pounds (1.80 billion euros).

However, the UK online retailer highlighted that there was a 240 million British pounds (279.1 million euros) improvement in free cash flow for the period, the strongest performance since 2027, as a result of disciplined inventory and cost management.

In fact, highlighted Asos, inventory reduction is ahead of target, with 593 million British pounds (689.7 million euros) of goods cleared against an annual target of 600 million British pounds (697.9 million euros), and further clearance sales planned in the last six months of the financial year. Approximately half of the reduction came from the clearance of clothing over one-year-old.

Full Year Outlook

For the full year 2024, the company anticipates sales to decline by between 5 and 15%, with a return to growth in the last quarter of the year, and positive adjusted EBITDA. In addition, there should be a return to pre-pandemic inventory levels and a reduction in net debt thanks to positive cash generation.  

“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 FY25 and beyond”, concluded Calamonte.