5th Nov 2024 09:38
(Alliance News) - Asos PLC on Tuesday reported lower revenue and a wider annual loss, but said it is on track with is "back to fashion" turnaround strategy.
Asos shares were down 6.6% at 351.39 pence early Tuesday in London. The former FTSE 250 stock is down 9.8% over the past 12 months.
The London-based online-only fashion retailer said its pretax loss widened to GBP379.3 million in the financial year that ended September 1 from GBP296.7 million the year before, as revenue fell by 18% to GBP2.91 billion from GBP3.55 billion.
More positively, gross margin held mostly steady at 40.0% from 41.1%. Adjusted gross margin was 43.4% in the recent year, down from 44.2% in financial 2024.
Adjusted pretax loss was GBP126.0 million in the recent year, widened from GBP70.3 million, while adjusted earnings before interest, tax, depreciation and amortisation declined by 36% to GBP80.1 million from GBP124.5 million. Asos said adjusted Ebitda was at the top end of market expectations.
Net debt was reduced to GBP297.1 million from GBP319.5 million amid positive free cash flow of GBP37.7 million, swung from outflow of GBP213.0 million.
Asos said it met its targets for its 'back to fashion' turnaround programme. These included clearing stock, embedding a new commercial model, and doubling flexible fulfilment.
Looking ahead to financial 2025, Asos said "strong foundations are now in place". It expects a "significant increase" in full-price sales, leading to at least 300 basis points in improvement to gross margin to over 46%.
Adjusted Ebitda is expected to rise by at least 60% to between GBP130 million and GBP150 million.
"We achieved our key priorities for the year, significantly reducing our inventory position, while generating positive adjusted Ebitda and free cash flow," said Chief Executive Officer Jose Antonio Ramos Calamonte, adding:
"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."
Sport Direct-owner Frasers Group PLC has a 24% stake in Asos and has suggested merging Asos with online rival boohoo Group PLC, in which Frasers has a 27% stake. Asos made no comment on that proposal in its earnings announcement on Tuesday.
By Tom Waite, Alliance News editor
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