Asos has unveiled its financial results for the year, revealing a challenging period for the fashion retailer. Group revenue saw a sharp decline of 18%, impacting overall performance significantly.
- The operating loss for Asos increased by 34%, reaching £331.9 million, highlighting the financial struggles faced during the fiscal year.
- Despite major setbacks, Asos managed to report a notable improvement in free cash flow, achieving a £250.7 million increase.
- A strategic reduction in stock levels of around 50% was executed, aimed at transitioning to a new commercial model successfully.
- The chief executive expressed optimism for the future, citing strengthened product offerings and a focus on operational efficiency.
Asos has released its annual financial results, marking a challenging year for the fashion retailer. The company reported a group revenue decline of 18%, totaling £2.9 billion for the year ending 1 September 2024. This downturn has substantially impacted Asos’s financial performance during this period.
The retailer’s operating losses widened significantly by 34%, amounting to £331.9 million. This increase in losses reflects the financial hurdles Asos has faced, underscoring the need for strategic adjustments to improve its economic standing.
Despite these financial challenges, Asos recorded a dramatic improvement in free cash flow, which increased by £250.7 million year on year. This improvement is a result of disciplined stock management and efforts to optimise the company’s financial health.
Asos implemented a strategic reduction in stock levels by approximately 50% since the full year 2022, maintaining stock at £520 million. This significant reduction, alongside a £100 million write-down, supports the company’s transition towards a new commercial model by the end of the 2024 fiscal year.
The company is undergoing further strengthening under the guidance of CEO José Antonio Ramos Calamonte, bolstered by ventures such as the Topshop Topman joint initiative and refinancing efforts. According to Calamonte, “Our product is now in the strongest position it has been in years, with the right level of newness to excite customers, and we have fundamentally improved our profitability through a relentless focus on operational efficiency.” Asos has seen positive results, with new product sales increasing by 24% year on year in the last three months.
Asos, amidst significant financial difficulty, looks towards a future of strategic growth and improved profitability.
