Relevant Document:
Trading Statement
U.K. fashion retailer ASOS said its sales during the 26 weeks to March 3 dropped by around 18%, broadly in line with guidance as the group annualizes actions taken in full-year 2023 to improve core profitability under the Driving Change agenda.
Free cash flow during the period improved by around £240 million compared with the first half of 2023, driven by improvements in underlying profitability and the clearance of aged stock.
Despite the sales decline, ASOS recorded free cash outflow of about £20 million during the half-year period, adding that this represents a “strong outcome” in a period characterized by significantly negative working capital.
ASOS said it closed the first half with a robust cash balance of more than £330 million, an improvement of more than £20 million from H1’23.
The retailer also reiterated its full-year guidance, stating it expects to record a 5% to 15% sales decline, positive adjusted EBITDA, inventory back to pre-Covid levels, and positive cash generation, reducing net debt.
The group noted it was making “good progress” on implementing its Back to Fashion strategy, including action to clear aged stock and transition to the new operating model by the 2025 financial year.
The company added that it is ahead on plan to improve stock efficiency and reduce inventory to around £600 million by year-end.