REG - ASOS PLC - Full Year Trading Update

AsosAnnouncement

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RNS Number : 3095B  ASOS PLC  30 September 2025

30 September 2025

ASOS Plc

("ASOS" or the "Company")

 

Full Year Trading Update

 

In FY25, ASOS made significant strategic progress, focused on building
sustainably profitable and resilient foundations. Its deliberate, multi-year
turnaround has involved three distinct but overlapping stages:

1)  Dealing with the legacy of the old model: ASOS first addressed the
significant legacy issues to improve its capital allocation - successfully
clearing its excess stock, reducing its warehouse footprint and strengthening
the balance sheet.

2)   Building the new commercial model: At the same time, ASOS also
transitioned to a comprehensively more disciplined, agile way of working,
retooling the way it operates - from how it designs and buys product, to how
it manages stock newness and returns - to deliver healthier full-price sales.
The Company has also undertaken a more targeted approach to its customer
proposition by market, a disciplined business-wide review and subsequent
renegotiation of key supplier contracts, and a structural reset of its fixed
cost base to support its new model, creating the headroom to reinvest in
growth. Together, these changes establish a structurally higher gross margin
profile and stronger, more profitable underlying economic model that ASOS can
grow in a sustainable fashion.

3)  Re-engaging customers: With stronger foundations in place, the final
phase is regaining the hearts and minds of customers at scale, starting with
its core customers in its core markets.

As it entered FY25, ASOS had essentially completed phase one, having
significantly reduced and comprehensively refinanced its net debt at the
beginning of the year, announcing further efficiencies to its global
distribution network with the mothballing of its Atlanta fulfilment centre,
and reducing its inventory position by more than 60% since the end of FY22
(from £1.1bn to c.£400m). Having concurrently scaled its new commercial
model and rebuilt its variable and fixed cost base - stage two of this process
- it had planned to shift gears to the final stage earlier in FY25. Instead,
more opportunity to reduce fixed costs and drive further variable cost
optimisation were explored and the business focus remained on securing even
stronger profitability foundations that will deliver further material
improvements to ASOS' cost base in FY26 and beyond.

Over the summer ASOS pivoted to the final phase of its transformation,
launching the start of a series of new customer experiences - including its
exclusive adidas x ASOS collaboration, the ASOS.WORLD loyalty program in the
UK, and expanding Topshop and Topman through new channels - with positive
early signs on customer engagement. In FY26, building customer love is the
primary focus for ASOS' energy, investment and resources. ASOS enters this
exciting phase of its transformation with a business model, stock profile and
underlying cost base that positions it to succeed, with more new customer
experiences to come.

ASOS' financial performance in FY25 reflects the success of its strategic
progress:

·    Gross profit margins up c.350bps YoY, driven by the successful
commercial model implementation, focusing on higher full-price sales mix and
lower markdown activity.

·    Scaling strategic models: In FY25, Test & React reached more than
20% of own-brand sales, and flexible fulfilment reached 10% of third-party
GMV, enabling it to bring customers the best, most relevant product faster and
more efficiently.

·    Operational and cost efficiencies delivered meaningful improvements
particularly across its supply chain, through a series of wide-ranging
initiatives including reducing the causes of unnecessary returns,
renegotiation of key distribution contracts and optimising its warehouse
footprint, leading to significant multi-year savings in FY26 and beyond.
Distribution and warehousing cost-to-serve is down c.3ppts over the last two
years, with further opportunities identified.

·    Adjusted EBITDA up more than 60% YoY, expected to be towards the
lower end of the £130m to £150m guided range, driven by higher gross margin
and continued cost efficiency, resulting in an adjusted EBITDA margin of more
than 5%, in line with consensus. During H2, ASOS delivered meaningful cost
actions which, while not delivering a material benefit during the period, have
permanently lowered ASOS' exit cost base, positioning the Company to realise
significant annualised savings in FY26.

·    Profitability improvements delivered amidst lower sales: Lower than
expected GMV, with group revenue slightly below consensus estimates, as the
Company continues to focus on higher quality sales against a soft consumer
backdrop.

·   Profit per order increased by c.30% YoY, underscoring the fundamental
reset in unit economics achieved through focusing on creating sustainably
profitable relationships with customers.

·      Free cash flow: Delivered a modest free cash inflow in FY25,
ahead of broadly neutral guidance.

Into FY26, the Company remains focused on its strategy and encouraged by the
progress it has made. As such, it remains confident in achieving FY26 adjusted
EBITDA and FCF in line with consensus forecasts, supported by further gross
margin improvement towards c.50% and continued cost efficiency. ASOS
reiterates its medium-term guidance for sustainable adjusted EBITDA growth to
a margin of c.8%, sustainably ahead of capex, interest, tax and leases as well
as expecting a return to revenue growth and improving gross margin towards
c.50%.

 

For further information:

 ASOS
 plc
 Emily MacLeod, Head of Strategy & Investor Relations                                                                                                      Tel: 020 7756 1000

 Teneo
 Jonathan Sibun / Will Palfreyman                                                                                                                          Tel: 020 7353 4200

 Note:

(1)Company-compiled consensus for FY25 as of 26 September 2025 based on 12
contributors: Revenue growth (constant currency): -8.4%, Adjusted EBITDA:
£138m, Adjusted EBITDA margin: 5.2%, Free Cash Flow: £7m.

(2)Company-compiled consensus for FY26 as of 26 September 2025 based on 12
contributors: Revenue growth (constant currency): +1.3%, Adjusted EBITDA:
£173m, Adjusted EBITDA margin: 6.5%, Free Cash Flow: £8m.

 

About ASOS

Founded in 2000, ASOS has 18m active customers in over 200 markets. We bring
fashion lovers around the world the best and most relevant fashion through our
unique own brands including ASOS DESIGN, ARRANGE, COLLUSION, Topshop, and
Topman, styled with the most exciting products from local and global partner
brands. With our expert in-house design team and agile and flexible commercial
model, including ASOS Fulfilment Services, Partner Fulfils, and Test &
React, we make the latest trends accessible to all and give customers the
confidence to be whoever they want to be.

Forward looking statements

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements" (including words such as "believe", "expect",
"estimate", "intend", "anticipate" and words of similar meaning). By their
nature, forward-looking statements involve risk and uncertainty since they
relate to future events and circumstances, and actual results may, and often
do, differ materially from any forward-looking statements. Any forward-looking
statements in this announcement reflect management's view with respect to
future events as at the date of this announcement. Save as required by
applicable law, ASOS plc undertakes no obligation to publicly revise any
forward-looking statements in this announcement, whether following any change
in its expectations or to reflect events or circumstances after the date of
this announcement.

 

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