Asos has warned that its profits will fall at the lower end of its guidance amid its ongoing turnaround programme as sales drop for the fourth consecutive quarter.
The fashion retailer expects earnings before interest and tax to be “around the bottom of the guided £40m to £60m range” for the six months to September 3, 2023.
It comes as sales dropped 15% in the three months to September 3, due to a “weaker than expected” July and August as a result of the wet weather. UK revenue plummeted 16%.
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Despite the fall, Asos expects “another profitable” fourth quarter thanks to £300m of ”material improvements to core profitability and strong inventory management” under its Driving Change turnaround programme.
Chief executive José Antonio Ramos Calamonte said: “ASOS has delivered on the Driving Change agenda and as a consequence is a leaner and more resilient business twelve months after its launch.
“We have reduced our stock balance by c.30%, significantly improved the core profitability of the business and generated cash against a very challenging market backdrop.
“We continue to focus on bringing the best fashion and the most engaging proposition to our customers as we make progress on our journey to sustainably profitable and cash generative growth.”
In June, the brand hailed a return to profitability while Mike Ashley’s Frasers Group raised its stake in Asos once again from 19.3% to 19.8%.
The online giant is now set to shutter its outlet department that houses non-strategic third-party brands as it focuses on further improving profitability.
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