“We continue to focus on making Asos the best possible destination for our fashion-loving customers. At the same time, we are delivering on our plan to turn the business around: to right-size our stock; to generate cash; to reduce our net debt; and to structurally improve our profitability. I am confident in the direction we are going, we have restored profitability in the period and made good progress in clearing through our inventory to generate cash. We retain ample balance sheet flexibility and reiterate our expectations for improved profitability, cash generation and reduction in net debt in H2 FY23 and beyond”, commented José Antonio Ramos Calamonte, Chief Executive Officer of Asos.

Third Quarter Results

In the three months to the 31^st of May, Asos saw its adjusted EBIT increase by more than 20 million British pounds (23.4 million euros), as compared to the same period last year, with the EBIT margin up by 2.50 percentage points. Therefore, it is maintaining its forecast for a second half adjusted EBIT of 40 million British pounds (46.8 million euros) to 60 million British pounds (70.3 million euros). These results prompted Frasers Group to lift its stake in the company for the fourth time in a month to 10.6%

This return to profit came in despite a revenue decline of 14% in the third quarter of fiscal 2023, reaching 858.9 million British pounds (1.0 billion euros), which reflects “deliberate actions on capital allocation to improve profitability”.

According to the company's trading statement, sales decreased by 15% in this period in the UK to 370.3 million British pounds (433.6 million euros), by 8% in Europe to 283.5 million British pounds (332.0 million euros), by 21% in the US to 121.1 million British pounds (141.8 million euros) and by 14% in the rest of the world to 83.9 million British pounds (98.2 million euros), on a comparable basis to the third quarter of fiscal 2022.

In addition, Asos recorded an inventory decline of 15% in this third quarter, consistent with its target of a 20% reduction throughout the year, with 86% of stock less than 12 months old.