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Investing.com -- Asos stock dropped 2.5% after the online fashion retailer reported fiscal year 2025 results that fell short of expectations, with sales declining more than anticipated.
The company reported a 14.9% decline in FY25 sales, significantly worse than company consensus expectations of -8.7%. Adjusted EBITDA came in at £131.6 million, 4.6% below consensus estimates of £138 million, while adjusted profit before tax was -£98.2 million, broadly in line with expectations.
Regional performance showed weakness across all markets. UK gross merchandise value (GMV) declined 7% YoY with revenue down 9%. European GMV fell 16% with revenue dropping 19%, while US GMV decreased 18% with revenue plunging 25%. Rest of World markets saw GMV decline 15% and revenue fall 16%.
Despite the disappointing results, Asos highlighted some positive developments, including scaling its test-and-react model to over 20% of own-brand sales and reducing supply chain costs by approximately 20% YoY.
The company also noted improved customer retention and average spend, with UK new customers up approximately 10% YoY year-to-date for FY26.
Looking ahead, Asos provided guidance for FY26, expecting GMV to show improving trajectory throughout the year, with performance 3-4 percentage points ahead of revenue. The company forecasts gross margin expansion of at least 100 basis points to 48-50%, and adjusted EBITDA growth to £150-£180 million, supported by cost discipline.
Asos also outlined mid-term targets including an adjusted EBITDA margin of 8%, gross margin approaching 50%, and capital expenditure of 3-4% of sales over time.
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