UK's ASOS sees profit rebound in FY25 even as sales & GMV decline

Adjusted gross margin rose 370 basis points year on year (YoY) to 47.1 per cent, supported by a higher full-price sales mix, reduced markdowns and early benefits from ASOS’ new commercial model based on speed, agility and tighter inventory discipline. Reported gross margin was also 47.1 per cent, up 710 basis points.

The adjusted EBITDA increased more than 60 per cent to £131.6 million, lifting adjusted EBITDA margin by 250 basis points to 5.3 per cent despite lower GMV. Profit per order rose 30 per cent YoY, underlining a structural reset in unit economics, ASOS said in a press release.

The active customers declined 14 per cent to 17 million and total shipped orders dropped 16 per cent to 57.3 million, and total visits were down 15 per cent to 1.91 billion, though conversion held steady at 3 per cent.

Statutory loss before tax narrowed to £281.6 million. On an adjusted basis, loss before tax improved to £98.2 million.

In the UK, GMV declined 7 per cent and total revenue 9 per cent, compared with steeper falls elsewhere. Visits and orders both fell 12 per cent, but average basket value increased 6 per cent and conversion was stable.

In Europe, GMV was down 16 per cent and revenue 19 per cent (17 per cent like-for-like), with visits down 17 per cent and orders down 20 per cent. Average basket value rose 5 per cent like-for-like, reflecting improved full-price mix.

US GMV fell 18 per cent and revenue 25 per cent (22 per cent like-for-like), with visits down 17 per cent and orders down 24 per cent. Like-for-like average basket value rose 8 per cent.

In the Rest of World segment, GMV declined 15 per cent and revenue 16 per cent (14 per cent like-for-like). Orders fell 17 per cent and visits 14 per cent, but average basket value increased 3 per cent on a like-for-like basis.

The company stated that it has entered the third stage of its turnaround, focusing on re-engaging customers at scale through more relevant product and immersive, ‘inspirational’ shopping experiences. Key initiatives include a multi-year Adidas x ASOS womenswear collaboration, the breatheMAX menswear essentials range, and the successful relaunch of Topshop and Topman with new wholesale partners. ASOS Live is strengthening app engagement, while ‘Styled for you’ uses AI to deliver personalised outfit recommendations.

Looking ahead to FY26, ASOS expects GMV growth running 3–4 percentage points ahead of revenue as flexible fulfilment scales. The company is targeting a further gross margin uplift of at least 100 basis points to a range of 48–50 per cent, driven by continued growth in full-price sales mix and FF models.

Adjusted EBITDA is forecast to rise to between £150 million and £180 million, supported by further gross margin expansion and ongoing cost discipline, with meaningful YoY margin improvement in both halves of the year. Free cash flow is expected to be broadly neutral as ASOS continues to invest selectively in growth and digital experience.

In the mid-term, the group aims to deliver revenue growth with an adjusted EBITDA margin of around 8 per cent, gross margin trending towards 50 per cent, capex reduced to 3–4 per cent of sales and a lower net debt and interest burden as profitability and cash generation improve.

“Our priority for FY26 is to deepen our relationships with customers and make ASOS not just a place to shop, but a destination for inspiration and style,” said José Antonio Ramos Calamonte, chief executive officer (CEO) at ASOS.

“Our strategy is to lean into what makes ASOS distinctive: our unique assortment of the best own brand and partner brand products, fuelled by speed and flexibility, styling that helps customers create outfits they love, and increasingly personalised experiences that feel relevant and exciting. This focus on differentiation, rather than commoditised promotions or transactional experiences, will create lasting value for customers and stakeholders and sustainably profitable growth,” added Calamonte.

ALCHEMPro News Desk (SG)