Proactive Investors - ASOS PLC (LON:ASOS) slipped to a first-half loss but said it remains on track to deliver full-year targets.
The online fashion retailer made an adjusted loss before tax of £87.4mln in the six months to 28 February 2023, compared to a profit of £14.8mln in the same period last year.
Revenues fell to £1.8bn from £2.0bn, reflecting a challenging trading backdrop and capital allocation towards profitability, while net debt grew to £431.7mln from £62.6mln.
“Its efforts to put the business back on the right course is impacting sales but is helping improve its margins at a critical time,” said Joshua Warner, an analyst at City Index.
Adjusted gross margins remained largely flat at 42.9% compared to 43.1%, Asos said in a statement.
"While some of these changes have impacted short-term sales growth, there are many causes for optimism as we progress through the second half of the year,” said chief executive José Antonio Ramos Calamonte, who was tasked with turning around the group following his appointment as CEO last June.
Asos said it is on track to deliver full-year targets, including over £300mln of 'Driving Change' agenda benefits, which added £100mln to profits in the first half.
Looking ahead, the focus will remain on profitability over the remainder of the financial year with the retailer committed to a cleaner inventory position.
“Initiatives are in place to drive a further £200mln of benefit in the second half and I am very confident of our return to sustainable profit and cash generation in the second half of the year and beyond,” Calamonte added.