By Editor,Mike Sheen
Copyright dailymail
ASOS shares fell sharply on Tuesday after the online fashion retailer warned annual earnings would be weaker than hoped, as demand has continued to prove ‘subdued’. The group struck an upbeat tone as bosses insisted ASOS had entered the ‘final stage’ of a major turnaround plan launched last year, having ‘permanently’ slashed costs and significantly improved profitability.
Online fashion retailers have struggled since their Covid-era peaks, weighed down by waning demand, growing costs and greater competition from the likes of Chinese industry giant Shein. ASOS has been ridding itself of excess stock and reducing business costs, while clamping down on excessive returns – including steps to ban customers from its platform. This has helped to drive adjusted earnings before nasties more than 60 per cent higher year-on-year in 2025.
But total sales for the year are set to come in below analyst expectations, with ASOS citing a ‘focus on higher quality sales against a soft consumer backdrop’. And it now expects full-year earnings to come at the ‘lower end’ of a £130million to £150million forecast range.
ASOS shares were down 7.2 per cent to 272p in early trading. They are down roughly 40 per cent since the start of the year. Nevertheless, ASOS says it has now entered the third and final step of its turnaround plan; ‘re-engaging customers’.
The group said: ‘With stronger foundations in place, the final phase is regaining the hearts and minds of customers at scale, starting with its core customers in its core markets.’ This means new offers and features for its customers, including a collaboration with Adidas, an expansion of its Topshop and Topman collection, and a new UK loyalty programme.
ASOS said it was seeing ‘positive early signs’ of improved customer engagement with the retailer. Chris Beauchamp, chief market analyst at IG, said: ‘It’s clear from this morning’s update that ASOS’s long journey out of its post-Covid nightmare is starting to bear fruit.
‘Restructured debts and lower inventory costs make it a much leaner operation. ‘There are signs that profitability is picking up too, though the push to boost sales remains hampered by tougher times for consumers generally.
‘Now it needs to show it can recapture the affections of its once-adoring customer base.
