By Sarah Young
LONDON (Reuters) -British online retailer ASOS (LON:ASOS) forecast its results would improve this year, as its more flexible model takes shape and it cuts excess stock, making it better placed to compete with Chinese-founded fast fashion giant Shein.
ASOS sunk to a first-half loss but said it expected to report positive adjusted core earnings for the 12 months to the beginning of September and was on course for more growth in 2025, sending its shares up 5%.
The company also on Wednesday named former Sainsbury's and Amazon (NASDAQ:AMZN) executive Dave Murray as its new chief financial officer, saying that his e-commerce experience would help return the group to profitability.
It has struggled to grow since the pandemic and is taking steps to speed up new collection launches and shed the high inventory levels which have dragged on profits.
For the 26 weeks to March 3, ASOS posted an adjusted EBITDA loss of 16.3 million pounds ($20.3 million), compared to the 4.6 million pounds it made in the period last year, on sales which were 18% lower.
Some analysts said the group had its work cut out to meet guidance, but Chief Executive José Antonio Ramos Calamonte said the new model was showing promise.
"When we do the right clothing at the right price, consumers fly into it," he said, highlighting strong sales of denim, skirts and animal prints this spring.
ASOS shares have lost over half their value in the last 12 months, as it faced growing competition from online rival Shein, which is expanding rapidly in Europe.
Disruption to Red Sea shipping as a result of geopolitical tensions has added to the challenge, delaying the arrival of stock at a time ASOS is aiming to bring customers new trends, faster.
The group had sought to minimise that impact by flying over some stock and the situation would normalise in the coming months, Ramos Calamonte said.
($1 = 0.8039 pounds)