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(Sharecast News) - Half-year losses at UK online fast-fashion retailer Asos have widened as it continued to deal with competition from Chinese rival Shein, but said it was ahead of target on shifting the mountain of excess stock it built up during the Covid pandemic.
The company on Wednesday reported an adjusted loss before tax of £120m for the 26 weeks to March 3, compared with a loss of £87.4m a year earlier. Adjusted core earnings swung to a £16.3m loss from a £4.6m profit a year ago.
Asos also named former Sainsburys and Amazon executive Dave Murray as its new chief financial officer, saying that his retail and e-commerce experience would help return the group to profitability.
Like-for-like sales fell 18% on an adjusted basis in the first half and the group said underlying earnings in the 2024-25 financial year are set to be "significantly" higher than the previous two years as it cuts costs and slashes stock levels.
Asos blamed the sales drop on overhaul efforts, having cut its stock intake by about 30% year-on-year to "right size" stock levels and also clearing a backlog of old items.
It said it was ahead of plans to reduce stock, with £593m sold off against a full-year target of £600m with further clearance sales set for the final six months of the financial year. Around half of the reduction came from the clearance of clothing more than a year old.
The company held guidance for positive adjusted earnings before interest, taxes, depreciation, and amortisation on sales expected to be 5 to 15% lower.
"Asos is becoming a faster and more agile business, and we are reiterating our guidance for the full year as we lay the foundations for sustainably profitable growth in full-year 2025 and beyond," said chief executive José Antonio Ramos Calamonte.
"At the beginning of this year we explained that 2023-24 would be a year of continued transformation for Asos as we take the necessary actions to deliver a more profitable and cash generative business."
"Our progress over the last six months means we can feel confident that from 2024-25 we'll have the right level of newness to excite our customers again."
Reporting by Frank Prenesti for Sharecast.com
