Asos reports profitability turnaround in H1 2025

UK-based online fashion retailer Asos has announced a significant turnaround in profitability for the first half of fiscal year 2025, showcasing the early success of its new commercial model implemented over the past two years.

The company reported a positive adjusted EBITDA increase of approximately 60 million pounds year-on-year in the first half period, attributing this growth to its revamped commercial strategy and consistent cost management.

Asos reports improved H1 results

In the UK, Asos's largest market, Asos Design total sales saw a 9 percent increase, contributing to market share growth. Globally, own-brand full-price sales also returned to growth during the first half.

Overall revenues declined by 13 percent to 1.3 billion pounds, aligning with previous guidance and FY24 trends, primarily due to the annualizing of declines in older inventory and optimized performance marketing.

CEO José Antonio Ramos Calamonte expressed confidence in the company's progress, stating, “"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 £60m YoY.”

“Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health.”

The company highlighted a positive customer response to increased product freshness and faster speed to market. This was reflected in a gross margin increase of around 500 basis points, driven by reduced markdown activity and a higher proportion of full-price sales.

Asos also expanded its brand portfolio, adding over 25 new brand partners in the first six month period, including Bimba y Lola, Jimmy Fairly, and Oh Polly, with an additional 40 brands slated to launch in the second half, alongside more exclusive collections.

Asos reiterates FY25 profitability outlook

Looking ahead, the company’s initiatives include the launch of Topshop.com, the Asos.World loyalty program, live shopping features, enhanced search and personalization, and further leveraging AI across the business.

Reiterating its FY25 profitability guidance, Asos expects a gross margin of at least 46 percent and an adjusted EBITDA increase of at least 60 percent to between 130 million pounds and 150 million pounds, driven by a significant increase in its full-price sales mix.

For FY25, revenue growth is expected towards the bottom end of the consensus range of negative 9 percent to negative 2 percent, while GMV growth is projected to be 1 to 2 percentage points better than revenue growth.