“Asos is becoming a faster and more agile business, aided by the incredible work of our teams to speed up all of our processes to deliver the fashion, quality and prices that our customers want, when they want it. I'm excited by the performance of our new collections, while we have also made great progress in monetising inventory that built up over the pandemic and in improving the core profitability of our operations. We have reconfirmed our guidance for FY24 as we lay the foundations for a more profitable, cash-generative business from FY25 and beyond”, commented José Antonio Ramos Calamonte, Chief Executive Officer of Asos.

First Half Trading Update

The company’s sales decreased by 18% in the six months to the 3^rd of March. This was in line with earlier guidance, reflecting lower demand and excess inventory.

However, Asos reported “good progress” on its Back to Fashion Strategy, insisting that it will reduce stock to 600 million British pounds (700.2 million euros) by the end of the year. Test & React now accounts for around 5% of own-brand sales, enabling the retailer to bring products from design to site in 2 to 3 weeks, increasing its agility in responding to rapidly changing customer demand.

The UK-based added that despite the sales decline, the first half cash outflow of 20 million British pounds (23.3 million euros) “represents a strong outcome in a period typically characterised by significantly negative working capital (see chart below) and represents our strongest H1 cash performance since FY17”. In the end, Asos ended this period with a cash balance of more than 330 million British pounds (350.1 million euros), an improvement of more than 20 million British pounds (23.3 million euros) from the first half of 2023.

As a result, the company continues to expect full-year sales to decline between 5% and 15%, adjusted EBITDA to be positive, inventories to return to pre-COVID levels and cash generation to be positive, reducing net debt.