Online Retailer Asos Achieves Profitability with EBIT Increase and Revenue Decline

  • Asos returns to profitability with EBIT increase of more than £20m year on year
  • Revenue drops 11% from £964m to £859m in the same period
  • Sales in UK decline by 14% from £432m to £370m
  • Adjusted EBIT guidance of between £40-60m expected for H2 FY23
  • CEO José Antonio Ramos Calamonte confident in the company’s direction and progress

Online retailer ASOS has reported a return to profitability after its earnings before interest and taxes (EBIT) rose more than £20 million year on year for the three months ended May 31. This comes despite a drop in revenue of 11% from £964 million to £859 million in the same period. The company attributes this increase to deliberate actions on capital allocation aimed at improving profitability and generating cost savings, totaling around £200 million. Sales in the UK fell from £432 million in 2022 to £370 million in 2023, a decrease of 14%. Asos now expects its adjusted EBIT guidance to be between £40-60 million in H2 FY23. CEO José Antonio Ramos Calamonte expressed confidence in the company’s direction and progress, stating that they are focused on becoming the best fashion destination for customers while improving profitability, generating cash, reducing net debt, and right-sizing inventory.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Asos’ return to profitability, the reasons behind it (profit optimization and cost savings), and the CEO’s statement on the company’s future expectations. It also includes relevant financial data such as revenue and EBIT figures. However, there is a minor issue with the year mentioned in the revenue drop (2023 instead of 2022).
Noise Level: 4
Noise Justification: The article provides relevant information about Asos’ return to profitability and the company’s plans for future improvement, but it could benefit from more detailed analysis of the factors contributing to the revenue decline and a comparison with competitors or industry trends.
Financial Relevance: Yes
Financial Markets Impacted: Asos’s stock price may be impacted by the announcement of returning to profitability and improved profitability expectations for H2 FY23
Financial Rating Justification: The article discusses Asos’s financial performance, including its return to profitability and adjusted EBIT guidance, which are relevant topics in finance. Additionally, the potential impact on the company’s stock price indicates a connection to financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk