# ASOS reports first-half loss as shoppers cut back
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-10
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: ASOS First-Half Loss: Impact on Shoppers and Future Profits
Meta Description: Discover how ASOS plans to bounce back after a first-half loss due to budget constraints, product returns, and tough competition in the fast fashion market.
URL: https://financedigest.com/asos-reports-first-half-loss-as-shoppers-cut-backhtml

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# ASOS reports first-half loss as shoppers cut back

LONDON (Reuters) -ASOS, Britain’s one-time poster child for the shift to online fashion retailing, swung to a first-half loss, hurt by a squeeze on household budgets and elevated product returns but said it was confident of a return to profit in the second half.

The group, which announced a major restructuring last October, said on Wednesday it made an adjusted loss before tax of 87.4 million pounds ($110.3 million) in the six months to Feb. 28, versus a profit of 14.8 million pounds in the same period last year.

Revenue of 1.84 [billion pounds](https://www.financedigest.com/edf-delays-uk-nuclear-project-to-2027-ups-price-by-3-billion-pounds.html "EDF delays UK nuclear project to 2027, ups price by 3 billion pounds") was down 10% on a constant currency basis.

ASOS and [rival Boohoo grew rapidly in recent years](https://www.financedigest.com/uber-rival-bolt-seeks-to-turn-profitable-next-year-ipo-in-2025.html "Uber rival Bolt seeks to turn profitable next year, IPO in 2025") as 20-somethings around the world snapped up their fast fashions, and demand surged again during the pandemic when high street rivals were closed.

But [supply chain](https://www.financedigest.com/daimler-truck-sees-higher-returns-as-supply-chains-demand-improve.html "Daimler Truck sees higher returns as supply chains, demand improve") issues, competition from rivals like Shein and a cost-of-living crisis have weighed on their business models.

[British households](https://www.financedigest.com/energy-costs-for-most-british-households-to-fall-18-from-july-cornwall-insight.html "Energy costs for most British households to fall 18% from July -Cornwall Insight") are currently contending with the highest inflation in western Europe, running at 10.1% in March.

[Shares in ASOS have halved over the last year](https://www.financedigest.com/flutters-full-year-earnings-turnaround-forecast-sends-shares-higher.html "Flutter’s full-year earnings turnaround forecast sends shares higher"), with some analysts fearing it may need to raise further equity.

ASOS ended the half with cash and undrawn facilities of 408.6 [million pounds](https://www.financedigest.com/uks-nationwide-to-pay-340-million-pounds-to-customers-after-profit-leap.html "UK’s Nationwide to pay 340 million pounds to customers after profit leap").

But for the full [year it forecast a free cash](https://www.financedigest.com/twenty-years-cash-isas-uk-fallen-short-expectations-alternatives.html "Twenty years on, cash ISAs in the UK have fallen short of expectations: what are the alternatives?") outflow of around 100 million pounds, around the bottom end of previous guidance.

Assuming no improvement to the external trading environment, it [forecast a “low double-digit” decline in second-half sales](https://www.financedigest.com/base-oil-market-base-oil-market-size-sales-share-and-forecasts-by-2030-2.html "Base Oil Market Base Oil Market Size, Sales, Share and Forecasts by 2030"), but with core earnings of 40-60 million pounds, reflecting its focus on profitable sales.

I am very confident of our return to sustainable [profit and cash](https://www.financedigest.com/covestro-sees-lower-2023-profit-cash-flow-as-macro-challenges-prevail.html "Covestro sees lower 2023 profit, cash flow as macro challenges prevail") generation in the second half of the year and beyond,” CEO José Antonio Ramos Calamonte said.

At the statutory level, ASOS [reported a first-half pretax loss](https://www.financedigest.com/global-natural-disaster-losses-reach-45bn-during-1h-2018-insurance-payouts-estimated-at-21bn-according-to-aon-catastrophe-report.html "Global natural disaster losses reach bn during 1H 2018; insurance payouts estimated at bn, according to Aon catastrophe report") of 290.9 million pounds, including 203.5 million pounds of one-time items relating to the overhaul of its business model.

($1 = 0.7923 pounds)

(Reporting by James Davey; editing by Sarah Young and Sharon Singleton)


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