Asos raises profit outlook amid strong margin gains
Asos has raised its profit outlook for the first half of the year,
Asos has raised its profit outlook for the first half of the year, forecasting a “significant” improvement in profitability despite ongoing challenges related to volume deleverage.
The online fashion giant attributed the positive shift to strong gross margin growth, driven by lower markdown activity, an increased full-price mix, and continued cost discipline.
Ahead of its first-half results next month, Asos confirmed that revenue growth is expected to align with consensus, while adjusted EBITDA is anticipated to surpass analyst estimates. The retailer projects total sales growth of 13%, adjusted EBITDA of £34m, and an adjusted EBITDA margin of 2.6%.
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“Encouragingly, Asos own brand full-price sales, a core engine of its customer proposition, returned to growth in the first half,” the company said.
“This was enabled by its market-leading Test & React model, now more than 15% of own-brand sales and growing, ensuring Asos can offer the most exciting product and set the trends for its fashion-loving customers.”
In addition to the positive financial update, shares in Asos surged this week following news that its largest shareholder, Anders Holch Povlsen, increased his stake to just below 30%, a level that would trigger a mandatory takeover offer.
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