Asos warns on sales as it slumps to £300m loss

Embattled fast fashion retailer Asos posted a near £300m annual loss on Wednesday, as it warned that sales would continue to fall.

Publishing delayed full-year results, the London-listed firm said adjusted group revenues fell 11% in the year to 3 September, to £3.54bn.

Adjusted earnings before interest, tax, depreciation and amortisation slid to £124.5m from £183.9m, while the pre-tax loss came in at £296.7m. Asos made a pre-tax loss of £31.9m a year previously.

Net debt also increased sharply, rising to £319.5m from £152.9m at the end of the 2022 full-year.

Asos said the results reflected a "challenging" market backdrop characterised by record levels of inflation and weak consumer sentiment.

The retailer boomed during the pandemic, but since then the weaker economic environment and operational issues have rocked profits. It is now undergoing a company-wide overhaul, dubbed internally Driving Change, including reducing stock, increasing profit per order and refinancing the balance sheet.

Chief executive Jose Antonio Ramos Calamonte, who has led the retailer since June 2022, said: "The 2023 full-year was a year of good progress for Asos in a very challenging environment and I am proud of what the business has achieved.

"We have reduced our stock balance by around 30%, significantly improved the core profitability of the business, strengthened our balance sheet and refreshed our leadership team."

However, Asos warned that the ongoing reduction of inventory in the 2024 full-year would "remain a drag on sales growth and profitability through the year". Sales are expected to decline by between 5% and 15%, with "positive" adjusted EBITDA.

It does not expect to return to growth until 2025.

Ramos Calamonte said: "Asos has ended 2023 a smaller but more resilient business and remains one of the leading players in online 20-something fashion. While the market has evolved and our model has adapted accordingly, we mustn’t lose sight of our core purpose."

Asos announced last month that publication of the results would be briefly delayed, after auditor PwC said it needed more time.