UK online fast fashion retailer Asos has reported a narrowed loss before tax of £270m ($360m) for the first half of fiscal 2024 (H1 FY24).
The figure marks a 20.9% improvement from a £290.9m loss in the same period in H1 FY23.
This comes amid a revenue decline of 18% to £1.50bn from £1.84bn in the same period of FY23, as the company continues to feel the effects of strategic actions taken to enhance profitability.
In the UK, Asos faced a 16% year-on-year (YoY) sales drop in H1 FY24, attributed to the challenging economic environment and cost-of-living pressures that particularly affect its young customer base.
Sales in Europe and the US also saw declines of 11% and 25% YoY respectively.
But despite the revenue downturn, Asos improved its gross margin to 40.0%, up by 390 basis points from 36.1% in H1 FY23.
The company's basic and diluted loss per share also decreased to 204.3p from 218.7p a year previously, reflecting an increase in shares issued after a May 2023 equity raise which partially offset the period's increased loss of £243.2m.
Its operating loss for the 26 weeks to 3 March 2024 was £246.8m against a £272.5m loss in H1 FY23.
However, Asos managed to reduce its net debt to £348.8m from £431.7m at the end of the same period of 2023.
Asos CEO José Antonio Ramos Calamonte said: “At the beginning of this year we explained that FY24 would be a year of continued transformation for ASOS as we take the necessary actions to deliver a more profitable and cash-generative business.
“Under our Back to Fashion strategy, we set out three priorities for the year – to offer the best and most relevant product, to strengthen our relationship with customers and to reduce our cost to serve.
“We have delivered on each of these in the first half of the year, including right-sizing our stock ahead of target to drive our best first-half cash performance since 2017 and seeing excellent results in our Test & React model, which is growing at pace.”
Looking ahead, Asos reaffirms its full-year guidance for FY24, anticipating a sales decline of 5% to 15%, positive adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA), and cash generation.
The company plans further clearance activities in the second half of the year to fully benefit from its new commercial model beginning in FY25, aiming to return to pre-Covid-19 revenue growth and EBITDA margin levels.
