ASOS revenues down 14% as it continues to focus on full-price sales

ASOS has reported a slump in revenues as the online fashion group continues to clear a build-up of stock and deliver full-price sales, but its CEO says the focus on the bottom line is working.

The group reported revenues of £1.3 billion for the six months to 2 March, down 14% on the same period last year. It also stated that revenues were expected to come in at the lower end of its guidance range for the full year.

However the company said it had been focusing on boosting the profit it makes from shoppers, and had seen the average value of people’s baskets rise by 4%. Adjusted EBITDA reached a positive £42.5m, compared to a loss of £16.3m in the same period last year. Loss before tax was £241.5m, compared to a loss of £270m last year. Gross margin was significantly improved at 45.1% versus last year's 40%.

Further signs that its transformation efforts were bearing fruit, included its ASOS Design range jumping by nearly a 10th in the UK, said CEO José Antonio Ramos Calamonte. "H1 FY25 is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability, with positive adjusted EBITDA up by c.£60m YoY.

"Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a +9% YoY increase in ASOS Design sales in the UK, and positive momentum with our partner brands. Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health. We look forward to a fantastic pipeline of new products, brands and customer experiences, and remain confident in our ability to deliver sustainable, profitable growth."

Looking ahead to the full year the company said that the increase in full-price sales would delivered an expected gross margin of at least 46% and that adjusted EBITDA would increase by at least 60% to between £130m to £150m. Revenue growth would be towards the bottom end of consensus range.

Ramos Calamonte said that the group was in a "resilient" state as it faced potential tariffs on imports into the US as President Donald Trump planned to scrap the "de minimis" rule that enabled orders of lower than $800 (£602) to be waived through customs at no charge. Read more here.