Asos: Loss widens but company optimistic on growth
Asos has reported a steep drop in revenue but said its restructuring has created the foundations for a return to growth.
The e-commerce giant reported an operating loss of £331.9m for the year to 1 September 2024, up £83.4m from a loss of £248.5m in 2023.
Like for like, revenue fell by 16 per cent year on year, from £3,538m to £2,896m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell £44.4m to £80.1m, while its adjusted loss before tax widened by £55.7m to £126m.
Despite the eye-catching figures, Asos said its long restructuring process had now been completed, with the “foundations of more agile and profitable business now in place.”
During its restructuring, the company cut jobs, reduced inventory, and accelerated its processes. It also refinanced hundreds of millions in debt and sold its stake in Topshop into a joint venture.
Asos in a strong position
The online fashion seller has been struggling to turn around the business after a boom in online shopping during the pandemic by selling off piles of unwanted stock and attempting to improve its fashion credentials. Like other businesses, Asos has also struggled with weak demand and high inflation.
José Antonio Ramos Calamonte, Asos’s chief executive officer, said the company was in “the strongest position it has been in years.”
“We achieved our key priorities for the year, significantly reducing our inventory position while generating positive adjusted EBITDA and free cash flow.
“With these solid foundations in place, we can focus on delivering experiences that delight our 20 million customers. There is much work to do, but we have already seen our efforts rewarded with new product sales increasing 24 per cent year on year over the last three months.
Asos expected its revenue and gross margin to grow by around 50 per cent “in the mid-term” and an adjusted EBITDA margin of around eight per cent.