Asos has narrowed its first-half losses and delivered a significant improvement in gross margin, reinforcing early signs that its turnaround strategy is beginning to take hold, despite sales continuing to fall.
The online fashion giant reported a pre-tax loss of £241.5m for the 26 weeks to 2 March 2025, down from a £291.1m loss in the same period last year.
Adjusted EBITDA hit £42.5m – a £58.8m year-on-year improvement – as the group’s gross margin surged by 490 basis points to 45.2%.
The retailer said the increase was driven by a higher mix of full-price sales, reduced markdowns, and tighter operational discipline across the business.
Sales, however, remained under pressure, with a 13% drop on a like-for-like basis. The number of active customers fell 16% to 18 million, reflecting what Asos described as a “strategic shift” aimed at improving the profitability of its customer base.
Asos CEO José Antonio Ramos Calamonte said: “H1 FY25 is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability, with positive adjusted EBITDA up by c.£60m.”
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Despite the margin gains, total sales fell 13% to £1.3bn in H1, with declines across all core geographies – particularly the US (-30%) and Europe (-19%).
However, the UK, its largest market, outperformed with a more modest 6% drop in sales, aided by a 6% rise in average basket value and growth in full-price own-brand sales.
Active customer numbers fell 16%, in line with the company’s focus on “fewer, more profitable” orders. Order frequency also declined, but average basket value rose 4%, reaching £42.38.
Total visits to the site fell in line with customer numbers, while conversion remained flat at 2.9%, even as promotional activity was scaled back.
The results follow a period of intensive transformation, with Asos reshaping its commercial model, clearing aged stock, and introducing new order thresholds for free returns in key markets – including the UK from early 2025.
Calamonte concluded: “Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health. We look forward to a fantastic pipeline of new products, brands and customer experiences, and remain confident in our ability to deliver sustainable, profitable growth.”
Looking ahead, Asos expects further EBITDA improvement during the second half and reaffirmed its guidance range for full-year sales to fall between 9% and 2%.
The business also highlighted growing momentum in its product strategy, pointing to the success of its Test & React model – now accounting for more than 15% of own-brand sales – and recent expansions to its influencer and brand partnership programmes.
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