ASOS (ASC) H2 2025 earnings summary

Executive summary

• Completed the second stage of transformation, focusing on building a sustainably profitable, flexible, and resilient business model.

• Addressed legacy issues by reducing inventory by over 60% since FY22, warehouse footprint by over 50% since FY21, and optimizing supply chain.

• Built a new commercial model emphasizing speed, agility, and profitability, including faster production, deeper partner relationships, and AI-driven personalization.

• Launched new initiatives like ASOS.WORLD loyalty program, AI stylist, and exclusive product collaborations, driving higher engagement and frequency among members.

Financial highlights

• FY25 GMV declined 12% year-over-year to £2,456.3m due to cautious consumer environment and deliberate profitability actions.

• Adjusted gross margin improved by 370bps to 47.1%, driven by higher full-price sales and reduced discounting.

• Adjusted EBITDA increased by over 60% year-over-year to £131.6m.

• Free cash inflow of £14.1m, ahead of guidance, and net debt reduced by 40% since FY23 to £184.7m.

• Inventory reduced by £118m (23%) to just over £400m, reflecting a more efficient operating model.

Outlook and guidance

• FY26 GMV expected to improve, outperforming revenue by 3–4ppt, with new customer acquisition up 10% in the U.K. year-to-date.

• Gross margin expansion of at least 100bps above 48% targeted, with a 48–50% range.

• Adjusted EBITDA guidance for FY26 set at £150–180m, with margin improvement in both H1 and H2 and broadly neutral free cash flow expected.

• Medium-term guidance unchanged: return to GMV growth, adjusted EBITDA margin of 8%, and sustainable structural free cash flow generation.