ASOS (ASC) H2 2025 earnings summary

Executive summary

• Completed the second stage of transformation, focusing on sustainable profitability, operational rigor, and building a flexible, resilient business model.

• Reduced legacy stock and debt, resetting the business model for speed, agility, and profitability, with inventory down over 60% since FY22 and warehouse footprint down over 50% since FY21.

• Enhanced product relevance, shopping experience, and operational efficiency, with AI-driven personalization, loyalty initiatives, and exclusive products.

• Positive early signs in FY2026: new customer growth, improved retention, and higher engagement, especially in the UK.

• Built deeper partner relationships and revamped the app to re-engage consumers.

Financial highlights

• GMV declined 12% year-over-year to £2,456.3m, with adjusted revenue down 14% to £2,464.8m.

• Gross margin increased by 370 basis points to 47.1%, driven by higher full-price sales and reduced discounting.

• Adjusted EBITDA improved by over £50 million to £132 million, up 60% year-over-year.

• Free cash inflow of £14.1 million, ahead of guidance and improved from a negative £23.6 million in FY24.

• Net debt reduced by 40% since FY23, now at £184.7 million.

Outlook and guidance

• FY2026 GMV expected to improve, outperforming revenue by 3–4 percentage points, driven by Flexible Fulfilment growth.

• Gross margin expansion of at least 100 basis points, targeting above 48% and up to 50%.

• Adjusted EBITDA guidance for FY2026: £150 million–£180 million, with margin improvement in both H1 and H2 and broadly neutral free cash flow.

• Medium-term targets: return to GMV growth, 8% adjusted EBITDA margin, sustainable structural free cash flow, and inventory at ~100 days.