ASOS (ASC) H1 2025 earnings summary

Executive summary

• Achieved a year-on-year improvement in adjusted EBITDA of up to £60 million, driven by a new commercial model, cost efficiencies, and disciplined operations.

• Gross margin increased by 490–510 basis points year-over-year, supported by higher full-price sales and reduced discounting.

• Own brand full-price business grew globally, with ASOS Design up 9% in the U.K., gaining market share.

• Variable contribution improved across all geographies and business lines, despite a 13–14% year-on-year sales decline.

• Significant reduction in inventory and improved stock turn, releasing capital for reinvestment.

Financial highlights

• Adjusted group revenue declined 13–14% year-on-year to £1,291.6m, reflecting reduced inventory and lower unprofitable marketing.

• Adjusted EBITDA improved to £42.5m, mainly from gross margin gains.

• Net debt reduced by £73m year-on-year to £275.8m, aided by refinancing and the Topshop/Topman transaction.

• Free cash outflow of £84.1m in H1, mainly due to working capital and seasonality, with significant inflow expected in H2.

• Stock turn improved by 15% year-on-year; inventory cover at best level in years.

Outlook and guidance

• FY25 guidance: gross margin to exceed 46%, adjusted EBITDA to grow at least 60% to £130–150m.

• Revenue growth expected at the bottom end of consensus, with GMV growth 1–2 points higher due to flexible fulfillment.

• CapEx to remain at ~£130m, including automation spend; free cash flow expected to be broadly neutral.

• Medium-term: adjusted EBITDA margin to move toward 8%, with gross margin potentially reaching 50%.

• FY26 expected to deliver meaningful free cash inflow, not dependent on sales growth.