ASOS (LON:ASC) Announces Earnings Results

Key Points

• ASOS’s turnaround gained momentum: FY2026 adjusted EBITDA rose 29% to £170 million, gross margin increased to 50.5%, and GMV returned to growth in Q4.
• Management expects further progress in FY2027, including low-single-digit GMV growth, higher EBITDA and positive free cash flow; net debt has fallen 40% year over year to a five-year low.
• The recovery faces risks: the October cyber incident disrupted marketing and is estimated to have reduced GMV by 2%–4% during affected weeks, while FY2026 free cash flow was a £16 million outflow.

ASOS (LON:ASC - Get Free Report) issued its quarterly earnings results on Thursday. The company reported GBX 41.60 EPS for the quarter, Digital Look Earnings reports. ASOS had a negative return on equity of 155.17% and a negative net margin of 10.10%. The business had revenue of GBX 224.56 billion during the quarter.

Here are the key takeaways from ASOS's conference call:

• ASOS reported FY2026 adjusted EBITDA of £170 million, up 29%, with gross margin rising 340 basis points to 50.5% and adjusted EBITDA margin reaching 7.6%. The company said it returned to GMV growth in Q4 after -9% in H1 and -1% in H2.
• Management expects low-single-digit GMV growth, further EBITDA improvement and positive free cash flow in FY2027. It said the active customer database continued to grow at the start of the year, despite disruption from the October cyber incident.
• Net debt fell 40% year on year to its lowest level in five years, supported in part by £116 million from selling two non-core warehouses. The company said its remaining fulfillment centers have capacity for order growth of more than 30%.
• Free cash flow was a £16 million outflow, slightly below expectations, due partly to working-capital timing; management cited a £9 million tariff refund received after year-end. ASOS expects positive free cash flow in FY2027 but did not provide an absolute forecast range.
• The October cyber incident prompted ASOS to pause some marketing and CRM activity, which management estimates reduced GMV by 2%–4% during the affected weeks, mainly in the U.K. The company said its investigation found that only basic personal information was accessed, with no passwords or payment-card details.

ASOS Price Performance

LON ASC traded up GBX 2 during trading hours on Friday, reaching GBX 416.50. The company's stock had a trading volume of 622,762 shares, compared to its average volume of 4,075,503. ASOS has a 1 year low of GBX 206.50 and a 1 year high of GBX 517. The company has a quick ratio of 0.39, a current ratio of 0.95 and a debt-to-equity ratio of 855.63. The company has a market capitalization of £498.34 million, a price-to-earnings ratio of -2.16, a PEG ratio of -1.26 and a beta of 2.32. The firm's 50-day moving average price is GBX 443.19 and its 200-day moving average price is GBX 326.91.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on ASC. Royal Bank Of Canada boosted their price objective on ASOS from GBX 275 to GBX 400 and gave the company a "sector perform" rating in a research note on Wednesday, August 5th. Deutsche Bank Aktiengesellschaft raised their target price on shares of ASOS from GBX 450 to GBX 490 and gave the stock a "buy" rating in a research note on Friday. Shore Capital Group reaffirmed a "buy" rating and set a GBX 520 price target on shares of ASOS in a report on Thursday. Finally, Berenberg Bank reiterated a "buy" rating and issued a GBX 750 price target on shares of ASOS in a research report on Thursday. Four equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of GBX 453.57.

Key ASOS News

Here are the key news stories impacting ASOS this week:

• Positive Sentiment: ASOS swung to an annual pre-tax profit as its turnaround strategy began to show results. Quarterly sales returned to growth, while FY2026 EBITDA rose 29% to £170.3 million. The company also provided FY2027 guidance. ASOS Swings To Annual Pre-tax Profit, Provides FY27 Guidance
• Positive Sentiment: Deutsche Bank upgraded ASOS to “buy” and raised its price target to GBX 490 from GBX 450, citing the company’s recovery. Shore Capital and Berenberg also reaffirmed “buy” ratings, with targets of GBX 520 and GBX 750, respectively. ASOS recovery prompts Deutsche Bank upgrade, but Panmure Liberum remains cautious
• Neutral Sentiment: Deutsche Bank’s more positive stance is not shared across the market: Panmure Liberum remains cautious, highlighting mixed analyst expectations for the recovery. ASOS recovery prompts Deutsche Bank upgrade, but Panmure Liberum remains cautious
• Negative Sentiment: A cyberattack disrupted trading and weighed on the business, presenting a near-term headwind even as sales and margins improved. ASOS returns to growth as annual losses narrow and cyberattack disruption weighs on trading

ASOS Company Profile

ASOS Plc operates as an online fashion retailer in the United Kingdom, the United States, Australia, France, Germany, Spain, Italy, Sweden, the Netherlands, Denmark, Poland, and internationally. It offers womenswear and menswear products. The company sells its products under the ASOS Design, ASOS Edition, ASOS Luxe, ASOS 4505, Collusion, Reclaimed Vintage, Topshop, Topman, Miss Selfridge, HIIT, AsYou, Dark Future, UNRVLLD/SPPLY, Crooked Tongues, Daysocial, Actual, and Weekend Collective brands, as well as through third-party brands.

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