Asos Shares Fall But ‘New Commercial Model is Working’ Says CEO

Online fashion retailer ASOS (LON: ASC) experienced a 4.9% dip on Thursday, despite the company highlighting significant progress in its profitability transformation. 

The decline occurred as the company released its interim results for the 26 weeks ending March 2, 2025, revealing a positive adjusted EBITDA of £42.5 million, a substantial improvement from the -£16.3 million reported last year.

The company emphasised that its ‘new commercial model' is the key driver behind this turnaround, leading to a 490 basis points increase in adjusted gross margin to 45.2%. 

The improvement is said to stem from reduced markdown activity and a stronger full-price sales mix, with UK sales of ASOS Design up 9% year-on-year.

While profitability metrics showed positive momentum, adjusted group revenue saw a 13% decrease to £1.29 billion, continuing the previous year’s trend. 

The retailer said it is driven by annualising declines in old inventory and optimising its marketing strategy. 

However, the retailer noted that customers are responding well to increased newness and speed to market.

Looking ahead, the company reiterated its full-year 2025 guidance, expecting a gross margin of at least 46% and an adjusted EBITDA between £130 million and £150 million.

The company also anticipates broadly neutral free cash flow for the year and significant free cash flow generation in FY26.

CEO José Antonio Ramos Calamonte stated that the H1 results are the “strongest sign yet that our new commercial model is working,” expressing confidence in the company's ability to deliver sustainable, profitable growth.