Asos beats forecasts, will respond 'flexibly' on US tariffs
UK fast-fashion retailer posted interim earnings ahead of expectations and said it would be "flexible" with sourcing and distribution to handle the impact of US tariffs.
Adjusted core earnings for the six months to March 2 surged 58.8% to £42.5m compared with a loss of £16.3m a year ago and forecasts of £34m.
"Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a +9% YoY increase in ASOS Design sales in the UK, and positive momentum with our partner brands," said chief executive José Antonio Ramos Calamonte.
Asos added that it expected annual earnings of £130m - £150m and full-year gross margin improvement to at least 46%, from 45.1% in the first half and 40% in 2024. Calamonte warned that he expected annual revenue growth "towards the bottom end" of the company-compiled consensus range of 1.7% to 9.1%.
On a reported basis, revenue fell 14% to £1.3bn and pre-tax losses narrowed slightly to £241.5m from £270m. Adjusted revenue fell 13% on a like for like basis to £1.3bn.
"We continue to closely monitor the evolving US tariff outlook and see opportunity to respond as necessary through improved agility and flexibility of our sourcing and distribution model," Asos said.
The company in January said it would shutter its US warehouse, with most US sales shipped individually from UK facilities.
"Since moving distribution to the UK during H2, we have seen a positive response from customers. Driven by an enhanced product assortment, we've seen a double-digit improvement in our sales run-rate with significantly higher full-price sales mix," Asos said.
"Going forward, our US customers will be served through a hybrid model, combining our automated UK fulfilment centre, a smaller, more flexible local US site, and direct from partners through Partner Fulfils."
Reporting by Frank Prenesti for Sharecast.com
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