Asos says that it is on track and making good progress despite sales having fallen for the 26 weeks to March 3rd, ’24. The business has been working to reduce stock levels and cut poorly performing third-party brands whilst ‘culling’ unprofitable customers, including serial returners.
CEO Jose Antonio Ramos Calamonte said, “Asos is becoming a faster and more agile business, aided by the incredible work of our teams to speed up all of our processes and deliver the fashion, quality, and prices that our customers want when they want it.
“I’m excited by the performance of our new collections, while we have also made great progress in monetising inventory that built up over the pandemic and in improving the core profitability of our operations.
“We have reconfirmed our guidance for FY24 as we lay the foundations for a more profitable, cash-generative business from FY25 and beyond.
Commenting on the Asos trading update, Julie Palmer, partner at Begbies Traynor, said:
“In a period that includes Christmas and the New Year, sales fell by nearly a fifth, worse even than their cautious guidance at the last set of results. The whole retail sector had to grapple with a weak consumer backdrop and an unexpectedly mild winter, but it’s still not pretty reading this morning.
“Management has made strides with their ‘back to fashion’ strategy by quickly shifting £170m of excess inventory and significantly improving the group’s free cash flow.
“While there are glimmers of progress, the management team at ASOS has a mountain to climb. The brand is teetering on the brink of losing its fashion-forward status, and with the retail sector hit by a myriad of survival challenges, steering the company back to a stable and prosperous path will be no mean feat.”
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