“We achieved our key priorities for the year, significantly reducing our inventory position while generating positive adjusted EBITDA and free cash flow… With these solid foundations in place, we can focus on delivering experiences that delight our 20 million customers. I am energised by the progress we have made so far and excited for the next phase of our journey”, commented José Antonio Ramos Calamonte, Chief Executive Officer at Asos.

Full Fiscal Year Results

In the fiscal year that ended on the 1^st of September, the company reported like-for-like (LFL – adjusted for the impact of foreign exchange and four additional days in fiscal 2023) adjusted revenue of 2.896 billion British pounds  (3.475 billion euros). Total LFL sales decreased by 16% year-over-year, reflecting the impact of the actions taken in the previous fiscal year to improve profitability.

Although the number of active customers declined by 16% as compared to the last year, the average basket value increased by 2% on a comparable basis. Additionally, a net order threshold for free returns was introduced in France, Germany and the United States (US) for customers with excessive returns. While this measure supports profitability by targeting a small segment of customers, it has created a slight revenue headwind due to fewer but more profitable sales.

In the UK, revenue fell by 12% year-over-year, driven by cost-of-living pressures that significantly affected the fashion retail sector. European markets saw a 16% decline in visits as compared to the previous year. This reflected weaker consumer demand, intense competition and ongoing aggressive promotional activity. In the US, sales contracted by 28% on a comparable basis.

Full year adjusted gross margin declined by 80 basis points 43.4% as compared to the prior year. This was primarily due to a 260 basis points drop in the first half of the year, driven by increased discounting to clear old stock as part of planned activities. However, a strong performance in the second half of the year, with a 120-basis points improvement, helped offset some of the earlier declines.

Despite lower overall sales volumes, adjusted costs to serve improved to 40.7% of revenue, reflecting improved operational efficiencies and lower fixed costs. Distribution costs fell to 11.3% of sales, down by 80 basis points year-over-year, as UK fulfilment optimisations and better carrier rates helped mitigate the impact of lower volume-based rebates.

Basic and diluted loss per share increased in fiscal 2024 to 338.7 million British pounds (406.44 million euros) from 223.1 million British pounds (267.71 million euros) last year. Convertible shares from bonds and employee share schemes have been excluded from the calculation as they were anti-dilutive for fiscal 2024.

Fiscal 2025 Outlook

Asos expects its new business model to yield benefits in fiscal 2025, with a gross margin improvement of at least 300 basis points and an adjusted EBITDA growth of 60%, in the range of 130 million British pounds (156 million euros) to 150 million British pounds (180 million euros).

Revenue trends are expected to reflect solid sales of a new inventory, partially offset by reduced sales of older stock. Therefore, the company expects an overall sales decline in the first half of the fiscal year. However, full year revenue growth is projected to be between negative 9% and 6%, with significant profit improvements expected irrespective of revenue levels.