“ASOS is a strong business with a compelling brand, customer offer and fashion credibility, with dedicated and passionate employees. Against the backdrop of an incredibly challenging economic environment, this unique combination has enabled our business to deliver a resilient performance this financial year in the UK – but I know we as a company can achieve far more,” José Antonio Ramos Calamonte, chief executive officer, said.
ASOS delivered sales growth of 4 per cent in 2022 (1 per cent on a reported revenue basis) with an adjusted profit before tax (PBT) of £22.0 million (adjusted PBT margin of 0.6 per cent), in line with guidance. The reported loss of £31.9 million is stated after £53.9 million of adjusting items. Adjusted earnings before interest and tax were £44.1 million.
“Today, I have set out a clear change agenda to strengthen ASOS over the next 12 months and reorient our business towards the future. This includes a number of decisive, short-term operational measures to simplify the business, alongside steps to unlock longer-term sustainable growth by improving our speed to market, reinforcing our focus on fashion, strengthening our top team and leveraging data and digital developments to better engage customers. On the basis of the actions I have set out today, the team and I will work resolutely to emerge from these turbulent times as a more resilient and agile business – all the time guided by our purpose, to give our customers the confidence to be whoever they want to be,” explained Calamonte.
Trading has remained volatile into the start of FY23, with September 2022 trading showing a slight improvement relative to August 2022. Against the backdrop of significant volatility in the macroeconomic environment, it is very difficult to predict consumer demand patterns for the upcoming year. Within the UK, ASOS expects a decline in the apparel market over the next 12 months but remains confident in its ability to take share against that backdrop, the company said in a press release.
As a consequence of moving to the new commercial model, ASOS will right-size its stock portfolio in the first half resulting in a non-cash write-off of £100–£130 million. Given the exceptional nature of the write-off, it will be treated as an adjusting item. ASOS will begin to operate with lower stock levels in the second half due to the lead time on orders and deliveries. In addition to this, ASOS expects c.£40 million of adjusting items relating to the change programme, and Topshop Brand amortisation.
Fibre2Fashion News Desk (RR)