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Asos PLC on Thursday said it returned to profitability with its ’P3’ adjusted earnings before interest and tax in the three months ended May 31, despite a drop in revenue.
Shares were up 13% at 369.30 pence each on Thursday morning in London.
The London-based online fashion retailer said P3 adjusted Ebit was improved by more than £20 million year-on-year, putting the firm on-track to deliver adjusted Ebit guidance of £40 million to £60 million in the second half of its financial year.
Revenue fell 14% at constant currency year-on-year, as expected by the company. Total group revenue amounted to £858.9 million in the period, down from £964.1 million the year before.
In particular, UK total sales fell by 15% at constant currency to £370.3 million from £431.8 million.
Chief Executive Jose Antonio Ramos Calamonte said: ‘I am confident in the direction we are going, we have restored profitability in the period and made good progress in clearing through our inventory to generate cash. We retain ample balance sheet flexibility and reiterate our expectations for improved profitability, cash generation and reduction in net debt in H2 FY23 and beyond.’
Asos added that profit per order was up 30% in the year to date compared to last year, driven by actions taken to ‘improve profitability of underperforming brands and geographies’.
Looking ahead, the company back full year expectations for financial 2023.
Last month, Asos said revenue declined by 8.2% to £1.84 billion for the six months ended on February 28 from £2.00 billion a year earlier. Pretax loss widened to £290.9 million from £15.8 million.
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