ASOS gross sales decline regardless of progress on turnaround plan

ASOS has reported a 18% decline in gross sales for the 26 weeks to three March 2024 however stated it has made progress on its turnaround technique because it continues to dump inventory to “proper measurement” the enterprise. 

The web big stated gross sales have been “broadly in-line with steerage”, with motion taken within the final monetary 12 months to enhance profitability, together with a 30% fall in inventory in take.

It made “good progress” on implementing its ‘Again to Vogue’ technique, because the enterprise continues to clear aged inventory and transition to a brand new working mannequin by FY25.

The retailer stated it’s forward on plans to enhance inventory effectivity and scale back stock to £600 million by 12 months finish, bringing high-fashion product from design to website in two to a few weeks to assist improve its agility in responding to evolving buyer demand.

Free money move improved £240 million in comparison with the primary half of FY23, with a free money outflow of £20 million, which ASOS stated was the “strongest first-half money efficiency since FY17”.

Because of this efficiency, the enterprise closed the half with a “strong” money stability of greater than £330 million, an enchancment of greater than £20 million from final 12 months.

Its full-year steerage stays unchanged, together with a 5-15% gross sales decline, constructive adjusted EBITDA, stock again to pre-COVID ranges, and constructive money era, lowering web debt.

José Antonio Ramos Calamonte, CEO of ASOS, stated: “ASOS is changing into a sooner and extra agile enterprise, aided by the unimaginable work of our groups to hurry up all of our processes to ship the style, high quality and costs that our clients need, when they need it.

“I am excited by the efficiency of our new collections, whereas we’ve additionally made nice progress in monetising stock that constructed up over the pandemic and in bettering the core profitability of our operations.

“We’ve reconfirmed our steerage for FY24 as we lay the foundations for a extra worthwhile, money generative enterprise from FY25 and past.”

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