Online fashion firm Asos has revealed widening losses after half-year sales plunged by nearly a fifth as it presses ahead with “necessary action” to turn the business around.
The group posted underlying pre-tax losses of £120 million for the six months to March 3 against losses of £87.4 million a year ago.
Like-for-like sales fell 18% on an adjusted basis in the first half and the group confirmed it still expects sales to fall by up to 15% over the full year.
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.
Chief executive Jose Antonio Ramos Calamonte said 2023-24 “is about taking the necessary action to get us to that path”.
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 and is aiming for further clearance sales over the final six months of the financial year.
Mr Ramos Calamonte said: “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.
“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 2024-25 and beyond.”
The group also announced on Wednesday the appointment of a new chief financial officer – Dave Murray, who most recently held the same position at MatchesFashion and will take on the post on April 29.
He takes over from Sean Glithero, who holds the role on an interim basis.
The business has been on a mission to reduce its stock and costs and improve its profitability.
But its woes have been compounded as many UK fast fashion retailers have suffered a difficult year or two amid significant pressure on household budgets, as well as tough competition from global rivals such as Shein and Temu and online marketplaces.
Mr Ramos Calamonte said: “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.
“While we can be proud of what we’ve achieved so far, there is always more to do.”