ASOS (LSE:ASC) reported a strong improvement in profitability during the first half of its financial year, with adjusted EBITDA rising by around 50% year-on-year despite a 9% decline in gross merchandise value (GMV). The improvement was driven by tighter pricing discipline, lower product returns and cost-saving initiatives that helped lift adjusted gross margin by 330 basis points to 48.5%.
Performance was supported by strong momentum in womenswear, which outpaced the broader business. The UK market also proved more resilient than the group overall, while new customer numbers grew 2% across ASOS’s four largest markets. Customer engagement was supported by a revamped mobile app, curated fashion features such as “The Heart”, and the expansion of the ASOS.World loyalty programme into the United States and Europe.
Management said the results demonstrate progress against its strategic priorities of delivering relevant fashion, improving the shopping experience and maintaining an efficient operating model. Measures implemented during the period included cutting fixed costs by more than 10% and improving the economics of warehouse and distribution operations.
With inventory described as being in a clean and well-managed position and further digital improvements planned, the company reiterated its full-year 2026 guidance. ASOS expects a stabilising GMV trajectory, further margin expansion, a substantial increase in EBITDA and broadly neutral free cash flow as it continues efforts to return the business to sustainable profitability.
Despite the improving operational picture, the company’s outlook remains constrained by ongoing financial challenges, including declining revenue, losses and relatively high leverage. Technical indicators also suggest a bearish-to-neutral market trend. However, more positive commentary from the latest earnings call, alongside improved profitability metrics and strengthened liquidity following refinancing actions, provides some support for the medium-term outlook.
More about ASOS plc
ASOS plc is a global online fashion retailer serving around 17 million active customers in more than 150 countries. The company sells both its own labels — including ASOS DESIGN, ARRANGE, COLLUSION, Topshop and Topman — as well as a range of partner brands. Its platform combines retail, marketplace and fulfilment services, enabling an agile commercial model designed to serve global fashion consumers.
Leave a Reply