Online fashion retailer Asos has posted a half-year loss amid “ongoing challenges in the operating environment”.
In the six months ended 28 February 2023, the group reported an adjusted loss of £69.4 million, compared with a profit and an adjusted profit before tax of £87.4 million.
Group revenue also dropped by 8% to £1.8 billion in the period, down from £2 billion in the same period last year.
Click here to sign up for our newsletter
As a result, the online-only retailer credited the drop to challenging trading conditions alongside its Driving Change initiatives to improve profitability.
These included reducing the number of markdowns, tighter control of marketing spend and country-specific proposition changes.
However, according to the retailer, it remains confident of a return to profit in the second half.
“Our focus is on improving our core profitability, prioritising order economics over top-line growth and I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions,” Asos CEO José Antonio Ramos Calamonte said.
”Thanks to the hard work and commitment of our teams, we have accelerated the roll-out of our new commercial model, delivered more than £100m of profit optimisation and cost-saving initiatives, extended our financing facility and continued to build out our top team while remaining committed to our Fashion with Integrity agenda.
“Taken together, these measures will create a more sustainably profitable and cash-generative business as we reinforce our position as a leading destination for our fashion-loving customers.”
He added: “While some of these changes have impacted short-term sales growth, there are many causes for optimism as we progress through the second half of the year. We are improving our gross margin run rate in the face of significant headwinds, are starting to see the benefits of a repositioned stock profile, and are taking action to reduce the proportion of our sales which are not profitable.
“Initiatives are in place to drive a further c.£200m of benefit in the second half and I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond.”
Image credit: Shutterstock
