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24 April 2025

ASOS Plc

Global Online Fashion Destination

Interim results for the 26 weeks to 2 March 2025

New commercial model driving profitability transformation

Summary financial results  

Strategic update and results summary

• Delivering profitability transformation, building on foundations laid over last two years. Positive adjusted EBITDA up c.£60m year-on-year ('YoY') in H1, driven by new commercial model and sustained cost discipline. Variable contribution increased c.30% YoY, supported by higher gross margin and better order economics. Total fixed costs held broadly flat in absolute terms, demonstrating strong cost control, effectively offsetting inflation.
• Customers responding well to increased newness and speed to market. Gross margin up c.500bps YoY in H1, driven by lower markdown activity and higher full-price mix, demonstrating strength of new commercial model offering. In UK, our largest market, ASOS Design total sales +9% YoY in H1, growing market share⁵, enabled by market-leading Test & React ('T&R') and investments into quality. Globally own brand full-price sales returned to YoY growth in H1.
• Sales trajectory developing as expected. In line with guidance, H1 revenues declined -13%, a continuation of FY24 trends, driven by annualising declines in old inventory (stock c.30% YoY), and optimised performance marketing.
• Significant progress on key strategic initiatives. Successfully scaled T&R to >15% of own-brand sales, on track for 20% FY target. Flexible Fulfilment ('FF') models now at c.7% of third-party GMV⁶, with major new market and partner launches set for H2. Added exciting new brands including Bimba y Lola, Jimmy Fairly and Oh Polly, with more than 25 new brand partners in H1, and a further 40 set to launch in H2, as well as more exclusive collections.
• Exciting pipeline of innovation ahead. Embedded new organisational structure in H1, designed to accelerate decision-making and empower culture of continuous innovation. In H2, initiatives include launching Topshop.com, ASOS.WORLD loyalty program, live shopping features, enhanced search and personalisation, as well as further leveraging AI across the business, including through our AI stylist and addressing causes of unnecessary returns.
• US proposition improvement. US customers now accessing greater product range via UK fulfilment, following changes to our global distribution model. Early response has been strong, with double-digit run-rate sales improvement and significantly higher full-price mix. From H2, full hybrid US model in will be in operation, including a smaller, more flexible local site and Partner Fulfils roll-out. Largely non-cash c.£180m adjusting item recorded in H1 related to the Atlanta site closure. Continue to expect c.£10-20m annual EBITDA benefit from FY26. We continue to closely monitor the evolving US tariff outlook and see opportunity to respond as necessary through improved agility and flexibility of our sourcing and distribution model.
• Free cash outflow driven by a return to normal seasonality of intake, with an H1 net working capital ('NWC') outflow. Stock health continues to improve, with inventory cover down c.15%, and sell-through up YoY. Continue to expect a significant free cash inflow in H2, driven by higher profitability and NWC inflow, to deliver broadly neutral FCF in FY25. We are confident in delivering meaningful FCF generation in FY26.
• Net debt reduction. Balance sheet significantly strengthened through a comprehensive refinancing and proceeds from the formation of the Topshop and Topman joint venture ('TSTM JV')⁷ in Q1 FY25.
• Re-iterating FY25 profitability guidance. Driven by a significant increase in our full-price sales mix, we continue to expect gross margin of at least 46% and adjusted EBITDA to increase by at least 60% to £130m to £150m. For FY25, we expect revenue growth towards the bottom end of consensus range⁸. FY25 GMV growth expected to be 1-2ppts better than revenue growth given scaling FF models.

José Antonio Ramos Calamonte, Chief Executive Officer said:

"H1 FY25 is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability, with positive adjusted EBITDA up by c.£60m YoY. Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a +9% YoY increase in ASOS Design sales in the UK, and positive momentum with our partner brands. Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health. We look forward to a fantastic pipeline of new products, brands and customer experiences, and remain confident in our ability to deliver sustainable, profitable growth."

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Notes

1.   Numbers throughout this section are subject to rounding.

2.   Like-for-like ('LFL') adjusted revenue are adjusted for the impact of foreign exchange translation (constant currency sales).

3.   The alternative performance measures used by ASOS are explained, defined and reconciled to statutory measures in the Alternative Performance Measures note at the end of the Financial Statements.

4.   Adjusted cost to serve defined as operating costs (excluding depreciation, amortisation, impairments and adjusting items) as a percentage of adjusted revenue.

5.   Kantar Fashion Clothing, Footwear & Accessories 24 weeks ended 2nd March 2025

6.   Gross Merchandise Volume ('GMV'): Adjusted retail sales plus revenue attributable to flexible fulfilment partners, net of returns and excluding sales tax.

7.   The arrangement with Heartland, whilst referred to as a joint venture throughout this report, will be accounted for as an associate, as detailed in note 12 of the Financial Statements

8.   Company-compiled consensus range for FY25 revenue growth of -9% to -2%, as of 31 March 2025.