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Asos swings to loss as inflation dents consumer spending

By Prachi Singh

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Management

Image: Asos x Nordstrom, New York

Asos delivered total sales growth of 4 percent or 1 percent on a reported revenue basis to 3,936.5 million pounds and a pre-tax loss of 31.9 million pounds, down from a profit of 177.1 million pounds a year ago.

The company expects to report loss driven by the usual profit phasing and exacerbated by elevated markdown to clear stock in the first half of FY23.

Commenting on the outlook, José Antonio Ramos Calamonte, chief executive officer of Asos plc said: “Trading has remained volatile into the start of FY23, with September 2022 trading showing a slight improvement relative to August 2022. Against the backdrop of significant volatility in the macroeconomic environment, it is very difficult to predict consumer demand patterns for the upcoming year."

"Today, I have set out a clear change agenda to strengthen Asos over the next 12 months and reorient our business towards the future. On the basis of the actions I have set out today, the team and I will work resolutely to emerge from these turbulent times as a more resilient and agile business,” Calamonte added.

Asos posts growth in the US and UK

The UK delivered revenue growth for the year of 7 percent to 1,762.8 million pounds. The company added that while overall online penetration stepped back year-on-year, Asos continued to grow its share of the adult online apparel market by 140bps to 10.1 percent in FY22.

The company further said that it reported growth of 2 percent in Europe to 1,170 million pounds as the region became increasingly exposed to higher energy costs and inflationary pressures. Growth did, however, accelerate in P4 to 9 percent as the company cycled through a period of softer comparatives.

In the US, the company delivered revenue growth of 10 percent for the year to 531.4 million pounds, supported by Topshop and Topman growth, the expansion of wholesale and a more locally relevant offer.

Rest of the World declined by 9 percent to 472.3 million pounds, hard hit by the continued delivery disruptions in the first part of the year. The region saw improved performance in the second half in Australia and Saudi Arabia as air traffic resumed supporting accelerated delivery propositions.

Asos announces departure of board members

Asos also announced that non-executive director, Eugenia Ulasewicz, has decided to not seek re-election at the company’s next AGM and accordingly will step down from the board at the conclusion of the AGM which is expected to be held on January 11, 2023.

The company’s non-executive director, Luke Jensen, has decided also to not seek re-election and will be stepping down from the board at the end of his term on October 31, 2022.

Commenting on the development, Jørgen Lindemann, chair of Asos, said: "On behalf of the board, I would like to thank Eugenia and Luke for their significant contribution to Asos and we wish them well for the future."

Asos