Despite widening losses, Asos is making strategic moves aimed at growth.
- The company’s pre-tax losses rose to £379.3m for the last financial year.
- Sales fell by 18%, with total revenue at £2.9bn.
- CEO José Antonio Ramos Calamonte remains optimistic about recent improvements.
- Asos is executing a strategy to enhance profitability and product freshness.
Asos has reported a significant increase in pre-tax losses for the year ending 1 September, reaching £379.3m, up from £296.7m in the previous year. This financial downturn occurred despite the company’s efforts to reduce inventory levels and enhance full-price sales, as the retailer remains committed to a focus on sustainable, profitable growth. The company’s total sales decreased by 18%, resulting in £2.9bn in revenue.
In this challenging financial period, Asos achieved an adjusted EBITDA of £80.1m, meeting the higher end of expectations. The company has been actively involved in a turnaround strategy aimed at transforming its stock management. Over the past year, Asos has significantly reduced its inventory, cutting it by approximately 50% and leading to fresher stock and increased demand for new products.
CEO José Antonio Ramos Calamonte highlighted, ‘Our product is now in the strongest position it has been in years, with the right level of newness to excite customers, and we have fundamentally improved our profitability through a relentless focus on operational efficiency.’ He also noted that sales of new products have seen a 24% increase year-on-year, bolstered by effective stock management, which has also reduced aged stock by around 75%. As a result, over 80% of Asos’ offerings are now less than six months old.
Looking to the future, Asos plans to leverage its ‘Back to Fashion’ strategy by integrating exciting brand partnerships, enhancing the customer experience, and expanding its test and react model to 20% of own-brand sales. Additionally, the retailer is set to launch a loyalty programme and a standalone site for Topshop. These initiatives aim to drive significant profit improvements in the upcoming fiscal year, irrespective of revenue levels.
Asos is navigating its financial challenges with a strong focus on strategic improvements and customer satisfaction.
