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Sandra Halliday Published
March 26, 2025
ASOS’s results are closely watched at present and like most underperforming stock exchange-listed businesses, it’s because we’re waiting to see just how bad its latest sales actually were.
We found out on Tuesday with the company reporting sales for the 26 weeks to 3 March down by a hefty 18%. It didn’t put a monetary figure on the numbers.
But that big drop was “broadly in line with guidance” as it had said the trend seen in the final period of FY23 would continue in the first half of FY24 as the firm annualised actions taken during FY23 to improve core profitability under its Driving Change agenda. H1 stock intake was also down around 30% year on year as it right-sized stock levels.
And it said it made “good progress on implementing the Back to Fashion strategy, including action to clear aged stock and transition to the new operating model by FY25”.
In fact, it’s ahead on its plan to improve stock efficiency and reduce inventory to around £600 million by year end. Its Test & React strategy is now tracking at around 5% of its own-brand sales, “bringing high-fashion product from design to site in two to three weeks, increasing our agility in responding to rapidly evolving customer demand”.
Further positives came as free cash flow improved by around £240 million year on year in H1 due to its improvements in underlying profitability and the clearance of aged stock.
And it said that despite the sales drop, H1 free cash outflow of around £20 million “represents a strong outcome in a period typically characterised by significantly negative working capital and represents our strongest H1 cash performance since FY17”.
Its full-year guidance is unchanged, including a 5%-15% sales decline, positive adjusted EBITDA, inventory back to pre-Covid levels, and positive cash generation, reducing net debt. That range of between minus 5% and minus 15% means the company must be expecting a much better second half as it will need some radically improved figures to skew the numbers back upwards after that 18% first-half drop.
So does the market think ASOS is on the right track? As mentioned, the company is stock exchange-listed so an instant reaction to its figures can be seen by the share price action early on Tuesday. The shares jumped over 5% first thing.
They’d reached a high of more than £70 each around six years ago but closed at less than £3.50 each on Monday, valuing the entire business at just £413 million — much less than the billions that the previous high had indicated it was worth. However, at 8:30 on Tuesday they changed hands for almost £3.64 each, valuing the business at nearly £435 million.
Pippa Stephens, Senior Apparel Analyst at GlobalData, called the performance disappointing, and “a significant slowdown from the decline of 12.2% experienced in Q4, with many of its Gen Z shoppers continuing to switch to more affordable fashion players like Shein and Cider, and its millennial customer base trading up to more premium brands for greater quality and value for money”.
But she liked that it’s “seeing green shoots from its Driving Change agenda” and that its Test & React model is allowing it to be more agile and reactive to the latest trends.
Yet she thinks “it will need to expand this significantly going forwards if it is to be first to market with the latest trends and truly compete with the likes of “.
She said: “ASOS has made several other significant steps to bolster its appeal, including its pop up store in London in November 2025. This received a lot of hype as it was its first ever physical location in the UK, though for future stores, it should take care to make its displays more cohesive, to ensure they are more inspiring and easier to browse. It also recently introduced a new marketing campaign called Unreal Finds, which will be placed in over 4,000 locations across the UK and will be brought to life through experiential events. With a focus on style discovery, this initiative features several TikTok stars, while the retailer will also be sponsoring the new Taylor Swift album for two weeks in the UK, allowing it to capitalise on the star’s huge fan base.
“Last month ASOS also announced the return of its Insider influencer programme, with 36 members of its staff selected to showcase its products on social media. This initiative had been well-received prior to being scrapped during the pandemic, so also has potential to aid its relevance going forwards. However, with some customers having pointed out the lack of inclusivity and diversity within its selection of influencers, it must ensure it solves this issue to avoid alienating a core part of its audience.”