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Asos PLC on Friday said its annual loss narrowed, despite falling sales, as margins improved reflecting a ‘higher full-price sales mix and lower markdown activity’. The London-based online fashion retailer said its pretax loss slimmed to £281.6 million in the financial year ended August 31 from £379.3 million the year prior. Reported revenue, however, fell 15% to £2.48 billion from £2.91 billion. Shares in Asos fell 3.4% to 238.50 pence each in London on Friday morning. Distribution expenses were 20% lower on-year at £262.3 million, while cost of sales shrunk by a quarter to £1.31 billion. Supply chain costs fell reflecting initiatives including reducing the causes of unnecessary returns, renegotiation of key distribution contracts and optimising warehouse footprint. Adjusted earnings before interest, tax, depreciation and amortisation surged 52% to £131.6 million from £80.1 million. This was in line with guidance in September that adjusted Ebitda would be at the lower end of £130 million to £150 million range. The profitability improvement came as Asos focused on ‘higher quality sales against a soft consumer backdrop,’ it said. Gross margin improved to 47.1% from 40.0%, or to 47.1% from 43.4% on an adjusted basis, on a better full-price sales mix and lower markdown activity. ‘Despite overall lower customer volumes in FY25, retention rates improved, especially among profitable customers, with increased average spend and profitability,’ Asos said. Looking ahead, Asos expects gross merchandise volume to show an improving trajectory through the new financial year, with full-year GMV 3 to 4 percentage points ahead of revenue performance as flexible fulfilment models scale. Asos expects further gross margin expansion of at least 100 basis points to 48% to 50% in financial 2026, driven by continued growth in full-price sale mix and flexible fulfilment models. Further adjusted Ebitda growth to £150 million to £180 million, supported by ‘continued variable and fixed cost discipline’, is forecast. Free cash flow is expected to be broadly neutral. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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