Asos improves profits despite drop in sales

In a full year trading update, Asos said its adjusted EBITDA was up more than 60% to between £130m and £150m, with an adjusted EBITDA margin of 5% – also in line with earlier consensus.

Asos also said that in the second half of the period it had “delivered meaningful cost actions which, while not delivering a material benefit during the period, have permanently lowered Asos’ exit cost base” to realise “significant” annualised savings in the 2026 financial year.

The pureplay fashion retailer said it had delivered increased profitability despite a drop in sales, with group revenues “slightly below consensus estimates” in the period, with Asos focusing on “higher quality sales against a soft consumer backdrop”.

Profits per order jumped by c.30% during the period, which Asos said underscores “the fundamental reset in unit economics achieved through focusing on creating sustainably profitable relationships with customers”.

Gross profit margins in the period jumped c.350 basis points year on year, driven by “successful commercial model implementation focusing on higher full-price sales mix and lower markdown activity”.

Asos said during the period it had trimmed operational costs and improved efficiencies across its supply chain by “reducing the causes of unnecessary returns”, renegotiating key distribution contracts and “optimising its warehouse footprint” – all of which it said would feed through in savings into the next financial year and beyond.

During the period, Asos launched its Asos.World loyalty programme in the UK, expanded Topshop and Topman into new channels and launched its tie-up with Adidas.

Heading into the 2026 financial year, Asos said it “remains focused on its strategy and encouraged by the progress it has made” and remains confident in achieving adjusted EBITDA growth in line with consensus forecasts.