Asos swings to profit but revenues drop 14 percent

Asos returned to profitability with EBIT up more than 20 million pounds and EBIT margin up 250 bps.

The company said that it is on track to deliver adjusted EBIT guidance of 40 to 60 million pounds in the second half of FY23.

Asos said in a statement that the company’s revenue declined 14 percent to 858.9 million pounds reflecting deliberate actions on capital allocation to improve profitability.

Commenting on the trading update, José Antonio Ramos Calamonte, chief executive officer of Asos, said: "I am confident in the direction we are going, we have restored profitability in the period and made good progress in clearing through our inventory to generate cash. We retain balance sheet flexibility and reiterate our expectations for improved profitability, cash generation and reduction in net debt in H2 FY23 and beyond."

The company’s adjusted gross margin for the quarter was up 350 bps.

Active customers were down by 0.8 million from the 24.9 million reported in the first half of FY23.

As announced on May 25, 2023, the company strengthened its balance sheet through a new, long-term 275 million pounds financing facility and 80 million pounds equity raise.

Asos will retain its focus on profitable sales and its commitment to reducing inventory for the remainder of FY23.