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Asos H1 profit hit by supply chain issues

By Huw Hughes

Apr 12, 2022

Business

Image: Asos

Asos saw its first-half profits take a significant hit from supply chain issues, but it has maintained its full-year outlook.

The British fashion giant made a pretax loss in the six months to February 28 of 15.8 million pounds compared to a profit of 106.4 million pounds a year earlier.

Its adjusted profit before tax came in at 14.8 million pounds, down from 112.9 million pounds a year earlier.

Asos cited “industry-wide supply chain constraints, elevated freight costs and ongoing Covid restrictions” as difficulties facing the retailer during the period.

The company made revenue of 2 billion dollars, a 4 percent increase year-over-year on a constant currency basis.

Demand returns for ‘going out’ fashion

In terms of trends, Asos said it saw an increase in demand for ‘going out’ wear during the half as Covid restrictions were loosened, including bridesmaid dresses and suits, which were up 83 percent year-over-year.

“Asos has delivered an encouraging trading performance, against the continuing backdrop of significant volatility and disruption,” said COO and CFO Mat Dunn in a statement.

Aside from the removal of Russia’s contribution to H2 following its decision to suspend sales last month, Asos said its guidance remains unchanged, though it did say “an increasingly challenging external environment introduces a greater degree of risk than normal”.

Despite those challenges, Asos said it expects sales growth to accelerate in H2.

Dunn continued: “We’ve entered the second half of the year well placed, and believe that our stock position, with increased product availability and newness, will stand us in good stead.

“We remain mindful of the potential impact on demand from the growing pressures on consumer spend and will continue to be responsive to any changes in market conditions as we progress the work started in the first half to deliver on our ambitions.”

ASOS