British fast fashion retailer ASOS has announced an 18% decrease in sales for the first half of the financial year 2024 (H1 FY24).

Despite the downturn in sales, the retailer delivered a significant improvement in free cash flow of £240m ($303m) compared to the same period of the previous year.  

This is attributed to enhanced underlying profitability and efficient clearance of aged stock. 

ASOS reported a free cash outflow of £20m during a period typically marked by negative working capital, marking its best H1 cash performance since the financial year 2017.  

The retailer concluded the half with a strong cash balance exceeding £330m, an increase of more than £20m from H1 FY23. 

ASOS has maintained its full-year forecast, with sales anticipated to decline by between 5% and 15%. 

It also expects inventory levels to return to pre-pandemic figures and a reduction in net debt through positive cash generation.  

ASOS CEO José Antonio Ramos Calamonte said: “ASOS is becoming a faster and more agile business, aided by the incredible work of our teams to speed up all of our processes to deliver the fashion, quality and prices that our customers want, when they want [them].  

“We have reconfirmed our guidance for FY24 as we lay the foundations for a more profitable, cash-generative business from FY25 and beyond.” 

ASOS is also making strides in its Back to Fashion strategy, which includes clearing aged stock and transitioning to a new operating model by FY25.  

The retailer is on track to enhance stock efficiency and aims to reduce inventory to £600m by the end of 2024.

Its Test & React initiative now accounts for 5% of own-brand sales, showcasing ASOS's ability to quickly bring high-fashion products from the design stage to its website within two to three weeks. 

In October 2024 ASOS plans to divest Topshop, a brand it acquired in 2021.