Online fashion retailer Asos reports first-half loss as shoppers cut back

At the statutory level, Asos reported a first-half pretax loss of £291m, including £204m of one-time items relating to the overhaul of its business model. Pic: Chris Ratcliffe/Bloomberg

Asos, the fast fashion online retail company, swung to a first-half loss, hurt by a squeeze on household budgets and elevated product returns but said it was confident of a return to profit in the second half.

The group, which announced a major restructuring last October, said it made an adjusted loss before tax of £87.4m (€100m) in the six months to February 28, versus a profit of £14.8m in the same period last year.

Revenue of £1.84bn was down 10% on a constant currency basis.

Asos and rival Boohoo grew rapidly in recent years as 20-somethings around the world snapped up their fast fashions, and demand surged again during the pandemic when high street rivals were closed.

But supply chain issues, competition from rivals like Shein and a cost-of-living crisis have weighed on their business models.

Inflation across the eurozone has cooled to 6.9% but remains stubbornly high.

Shares in Asos have halved over the last year, with some analysts fearing it may need to raise further equity.

Asos ended the half with cash and undrawn facilities of £409m.

But for the full year it forecast a free cash outflow of around £100m, around the bottom end of previous guidance.

Assuming no improvement to the external trading environment, it forecast a "low double-digit" decline in second-half sales, but with core earnings of £40m to £60m, reflecting its focus on profitable sales.

"I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond," CEO José Antonio Ramos Calamonte said.

At the statutory level, Asos reported a first-half pretax loss of £291m, including £204m of one-time items relating to the overhaul of its business model.

- Reuters