ASOS predicts a second year of falling sales as losses widen
Shares in ASOS have fallen sharply after it forecast a second year of falling sales while reporting annual losses.
The online fashion retailer's stock fell by more than 6% following its update to the market, which was delayed by a week due to an auditors' request for more time.
The company has moved to turn around its fortunes under chief executive Jose Antonio Ramos Calamonte, who has been battling a decline in post-pandemic demand and historic stock woes.
Mr Calamonte, who is aiming to slash costs, reduce excess fashion volumes and refresh ranges, refused to comment when asked about a report by Sky News that ASOS was considering a sale of the Topshop brand.
"We don't comment on rumours," he told an analyst call.
ASOS warned historic stock problems would continue to drag on sales and profitability during its current financial year.
It forecast sales declines of between 5% and 15%.
The company reported an annual loss of £29m for the year to 3 September, with revenues down 11%.
On a statutory basis, pre-tax losses widened sharply to £297m from £32m a year earlier.
Its fortunes are in stark contrast to those of rival Next, which revealed on Wednesday morning its fourth profit upgrade in six months following a 4% rise in full price sales during its third quarter to 28 October.
Mr Calamonte told investors: "FY23 was a year of good progress for ASOS in a very challenging environment and I am proud of what the business has achieved.
"We have reduced our stock balance by c.30%, significantly improved the core profitability of the business, strengthened our balance sheet, and refreshed our leadership team.
"Encouragingly, stock that was brought in under our new commercial model over the summer months has performed strongly and this gives us the confidence to accelerate the rollout of our new processes.
"As such, we are taking decisive action in FY24 to clear stock brought in under our old model while substantially improving our speed to market and investing in our brand, reminding our customers what we're really about: fashion."
Read more from Sky News:
'Constrained supply' of properties drives surprise house price growth
WeWork shares plunge on report of looming bankruptcy filing
Temporary accommodation spending 'threatening to overwhelm council budgets'
AJ Bell's investment director, Russ Mould, said of the performance however: "ASOS is battered and bruised. While the company desperately tries to talk up progress with reshaping the business, the headline numbers for its full-year results tell a different story.
"Sales are down, net debt has ballooned and pre-tax losses have got significantly worse.
"So much for ASOS being a disruptor in the fashion industry - its fifteen minutes of fame have long gone and the business is now having to rethink its strategy."
