Asos reports 50 percent increase in underlying profitability for first half

UK online fashion retailer Asos has announced a significant improvement in its financial performance for the first six months of the financial year ending March 25, 2026. The group reported an approximate 50 percent year-over-year increase in adjusted EBITDA, driven by enhanced gross margins and rigorous cost discipline.

According to the pre-close trading update released ahead of its half-year results, Asos reiterated its guidance for the full financial year 2026. The company attributed its momentum to the execution of three strategic pillars: Relevant Fashion Product, Inspirational Shopping Experience, and Efficient Operating Model.

Operational efficiency drives margin growth

The adjusted gross margin rose by 330 basis points to 48.5 percent. Despite the negative impact of International Emergency Economic Powers Act (IEEPA) tariffs, the business saw a reduction in its underlying returns rate by approximately 160 basis points.

Asos chief executive officer, José Antonio Ramos Calamonte, stated: “Our first half shows continued progress on executing our strategic priorities. The result has been a c.50% YoY increase in underlying profitability.” Calamonte noted that enhancements to the customer experience, including a revitalised app, are assisting consumers in finding curated outfits rather than individual items.

Regional and category performance

While gross merchandise value (GMV) declined by 9 percent YoY, the company reported sequential quarterly improvements. The UK market, which is the largest for the retailer, outperformed the wider group with a GMV decline of only 5 percent YoY.

Womenswear remains a priority category and delivered a 10 percentage point improvement in its growth rate during the first half compared to the second half of the previous financial year. Within this category, outerwear, evening dresses, and tops achieved positive GMV growth.

The retailer has focused on its digital interface to drive engagement. The Asos app underwent a significant revamp, introducing features such as virtual try-on and the ability to save full outfits. These updates contributed to an uplift in net sales per customer and higher average order values.

Furthermore, the loyalty programme, Asos.World, has expanded its reach. After gaining 3.5 million members in the UK, the initiative was rolled out to customers in the US, Germany, and Austria.

Financial outlook for 2026

Asos confirmed its expectations for the remainder of the year. The group anticipates an adjusted EBITDA between 150 million pounds and 180 million pounds. Gross margin is expected to improve by at least 100 basis points, reaching a range of 48 percent to 50 percent.

The company also expects GMV to maintain an improving trajectory, finishing the year three to 4 percentage points ahead of revenue, while maintaining a broadly neutral free cash flow.