These results reflect the company's focus on capital allocation actions to enhance profitability, as well as a challenging trading environment. The actions taken by ASOS account for roughly 50 per cent of the revenue decline since December but are leading to improved order economics. Sales momentum in January and February was affected by deliberate profitability actions, including reduced markdowns, disciplined marketing spending, and country-specific proposition changes, the company said in a media release.

Regionally, UK sales saw a 10 per cent YoY decrease, Europe remained flat, US sales declined by 7 per cent YoY, and sales from the rest of the world experienced a 12 per cent YoY drop. These variations in performance reflect regional economic differences and the company's country-specific profit actions, which are in line with its focus on profitability over top-line growth. Despite these trends, ASOS continued to grow its share of the core UK online retail market among its main 16-35 demographic and increased its share of customer spending.

The adjusted gross margin remained relatively stable, both YoY and from the four months to December 31, 2022 (P1), at 42.9 per cent. Encouraging progress was observed over the period, with February's adjusted gross margin up by over 300 basis points (bps) YoY, and this trend was maintained through March and April, supported by lower freight and duty rates.

Stock levels were reduced by 9 per cent compared to FY22, slightly surpassing the 5 per cent H1 FY23 reduction planned during the P1 FY23 update. ASOS reported an adjusted EBIT loss of £69.4 million and an adjusted loss before tax of £87.4 million for H1 FY23, the release added.

Jose Antonio Ramos Calamonte, chief executive officer, said: "Our focus is on improving our core profitability, prioritising order economics over top-line growth, and I am pleased with the strategic and rapid operational progress the business has made in the first half of the financial year, against some very challenging trading conditions.

“Thanks to the hard work and commitment of our teams, we have accelerated the roll-out of our new commercial model, delivered more than £100 million of profit optimisation and cost saving initiatives, extended our financing facility and continued to build out our top team while remaining committed to our Fashion with Integrity agenda. Taken together, these measures will create a more sustainably profitable and cash generative business as we reinforce our position as a leading destination for our fashion-loving customers.”

Fibre2Fashion News Desk (DP)