ASOS has reported a rise in profits in the last financial year despite a fall in sales.
The online fashion retailer stressed its progress in cutting costs and clearing stock even as revenues slipped. However profit came in at the lower end of the expected range, it said.
The company had previously forecast core profit of £130-150 million. Adjusted EBITDA was up more than 60% year-on-year, it reported.
The online fashion retailer, which has faced intense pressure from inflation and shifting consumer demand, said it has reduced inventory sharply year-on-year.
Founded in 2000 and led by José Antonio Ramos Calamonte since 2022, ASOS has 18m active customers in over 200 markets. It sells its own brands, including Topshop and Topman, as well as local and global partner brands.
It said it had made ‘significant strategic progress’ in FY25, focused on building sustainably profitable and resilient foundations, as part of a multi-year turnaround.
ASOS said this first saw it address legacy issues to improve its capital allocation – successfully clearing its excess stock, reducing its warehouse footprint – including the mothballing of its fulfilment centre in Atlanta in the US – and strengthening the balance sheet. It has reduced its inventory position by more than 60% since the end of FY22, from £1.1bn to £400m.
It has also transitioned to a more disciplined, agile way of working – from how it designs and buys products, to managing stock and returns – to deliver healthier full-price sales. It said these changes establish a structurally higher gross margin profile and stronger, more profitable underlying economic model.
“With stronger foundations in place, the final phase is regaining the hearts and minds of customers at scale, starting with its core customers in its core markets,” it added.
The company has launched a series of new customer experiences – including its exclusive adidas x ASOS collaboration, the ASOS.WORLD loyalty program in the UK, and expanding Topshop and Topman through new channels – with ‘positive early signs on customer engagement’.
It added: “During H2, ASOS delivered meaningful cost actions which, while not delivering a material benefit during the period, have permanently lowered ASOS’s exit cost base, positioning the company to realise significant annualised savings in FY26.”
Profit per order increased by around 30%, it added.
ASOS’s share price has dropped 38% this year and 8% since trading opened this morning. At the time of writing (9.30am), its share price is around 271p, with a market capitalisation of £322m.
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