Fast fashion giant Asos has hailed a return to profitability over the past quarter as it pushes ahead with major cost-cutting as part of its turnaround plan.
However, the online retailer revealed a drop in sales in the three months to May as consumer spending remains under pressure.
Asos has suffered slumping sales over the past year amid waning customer demand in the face of rocketing household bills, and has also experienced supply disruption and surging costs.
As a result, the company said on Thursday that it has secured £200 million (€234 million) of cost savings and profit efficiencies so far this financial year as part of its recovery plan, and is on track to meet its £300 million (€351 million) target.
Bosses said adjusted pre-tax earnings for the quarter were up £20 million year-on-year, with the group set to meet its earnings guidance of between £40 million and £60 million over the current half-year.
The company said its net debt grew to £153 million by the end of last year after purchasing too much stock and has since cut inventory by 15 per cent compared with last year.
In the latest update, it posted an 11 per cent decline in total group revenue to £858.9 million for the three-month period, amid a 14 per cent decline in sales in the UK, its biggest market.
It comes weeks after it raised £75 million through a share placing in order to support its turnaround plan.
Chief executive Jose Antonio Ramos Calamonte said: “We continue to focus on making Asos the best possible destination for our fashion-loving customers.
“At the same time, we are delivering on our plan to turn the business around: to right-size our stock, to generate cash, to reduce our net debt, and to structurally improve our profitability.
“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.”
The company also held firm on its financial guidance for the year.
