Can embattled retailer ASOS bounce back into fashion with investors?

The online fast-fashion retailer is wrestling with weak consumer demand and cash flow pressures

Half-year results on 10 May from ASOS (ASC) will give investors a read into how 20-something fashionistas are coping with the cost-of-living crisis, as well as an update on progress against new CEO José Antonio Ramos Calamonte’s ‘Driving Change’ turnaround strategy.

Last October, the online fast-fashion retailer reported an alarming 90% drop in pre-tax profits for the year to August as margins were squeezed by higher costs and an increase in product returns as customers struggled with the disposable income squeeze.

In its post-Christmas update (12 January 2023), the £737 million business reported continued weak trading, though ASOS said it continued to expect ‘significantly improved’ profitability and cash generation in the second half of the financial year to August 2023 and beyond, but only after incurring a first-half loss.

One of the London stock market’s most-shorted stocks, ASOS has reportedly been targeted by feared UK short-seller Shadowfall Research, nicknamed ‘the dark destroyer’, on the basis its short-term need for cash could necessitate a further equity raise at a significant discount.

Having strengthened the leadership team, new broom Calamonte is reducing ASOS’ inventory and slashing costs as he looks to stem
the flow of cash which is bleeding out of the hard-pressed fashion purveyor. [JC]

Iger looks to continues his revamp of Disney with streaming reset

Entertainment giant to report under new structure for the first time

Entertainment giant Walt Disney (DIS:NYSE) reports its second quarter earnings on 10 May and the market will want evidence that chief executive Bob Iger is already seeing the fruits of his turnaround plan.

Iger returned to run Disney at the end of 2022 after his previous successor Bob Chapek foundered. He has a two-year mission to clean up the House of Mouse.

The market responded positively to his appointment and suggestions for change, leading the share price to rally. However, a positive market reaction to better-than-expected first quarter earnings proved short-lived.

Iger is cutting jobs, an obvious starting point when looking to reset a business, as he looks to push the Disney+ streaming operation to profitability by the 2024 financial year.

The upcoming quarterly numbers will represent the first time Disney has reported under the new simplified structure instituted by Iger with three core business segments: Disney Entertainment, ESPN and Disney Parks, and Experiences and Products.

In the background a battle with Florida governor Ron De Santis rumbles on over Disney’s stance on LGBTQ+ issues and the state’s so-called ‘Don’t Say Gay’ bill, with the conflict now moving to the courts.

Whether this will prove a distraction to the company’s turnaround efforts and what impact it has on the brand remains to be seen. [TS]

UK UPDATES OVER THE NEXT 7 DAYS

FULL-YEAR RESULTS

May 10: Anexo, Directa Plus, Airtel Africa, Vertu Motors

INTERIMS

May 9: Treatt

May 10: Compass, ASOS

May 11: Grainger

TRADING UPDATES

May 5: InterContinental Hotels, RHI Magnesita

May 10: Balfour Beatty, Videndum, Rolls-Royce

FIRST QUARTER RESULTS

May 5: International Consolidated Airlines

May 9: Kosmos Energy

May 10: TBC Bank Group

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

May 5: Warner Bros Discovery, Brookfield Business, Newmark, Moneygram, National Healthcare

May 8: Berkshire Hathaway, PayPal Holdings, BionTech, Tyson Foods, Credicorp, Lucid Group, Aecom Technology, Treehouse Foods, Alpha Bank, Brighthouse Financial, Beam, New Mountain Finance, Argo Group, Rover, Hudson Pacific,

May 9: Duke Energy, Air Products, Electronic Arts, Fox Corp, Warner Music, Jackson Financial

May 10: Walt Disney, Manulife Financial, Roblox, EON

May 11: Merck, Airbnb, Fairfax Financial, Krispy Kreme

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