MoPh Markets

ASOS Returns to Profitability Despite Revenue Decline

  • ASOS reports adjusted EBIT up more than £20m
  • Revenue declines 14%
  • Profit per order up over 30% YTD

ASOS has announced a return to profitability but a decline in revenue in its third quarter results on Thursday as it continues to execute on its recovery plan.

ASOS reported adjusted EBIT is up more than £20m YoY and is on track to deliver adjusted EBIT guidance of £40m-£60m in H2. CEO Jose Antonio Ramos Calamonte announced a change of its business model in October, through prioritising profit over top line growth.

As a result, the return to profit came despite revenue falling 14% to £858.9m, with US sales achieving the largest declines, down 21%. The online fashion firm stated its revenue decline was expected and reflects the deliberate actions to improve profitability, as showcased from its profit per order up 30%.

The group’s expectations for H2 FY23 and full-year FY23 are unchanged . The company stated they remain cautious on top-line outlook for the year-ahead.

ASOS shares have taken a significant hit this year, falling 35%, but its recovery plans and an improvement to the firms profitability will be vital to regain some of its losses.

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