ASOS PLC said Wednesday that it swung to a pretax loss for fiscal 2022 on higher sales costs, and distribution and administrative expenses, and said the business environment remains volatile going into the new year.
The online fashion retailer ASC, +11.22% posted a pretax loss for the year ended Aug. 31 of 31.9 million pounds ($36.1 million) compared with a profit of GBP177.1 million for a year earlier.
Its gross margin decreased by 1.8 percentage points to 43.6% while revenue rose to GBP3.94 billion from GBP3.91 billion for the year before. The company said it saw a change in consumer behavior as customers facing inflation and disposable income-pressure increasingly returned items, leading to lower-than-expected second half income.
ASOS said the business environment going into fiscal 2023 remained volatile, with September showing a slight improvement from August. Within the U.K., the company expects a decline in the apparel market over the next year but is confident it can take share in that environment.
The company said it expects to report a loss in the first half of fiscal 2023, driven by normal profit phasing and exacerbated by elevated markdowns to clear stock from a change in commercial model. It further expects a non-cash stock write-off of GBP100 million to GBP130 million.
Write to Joe Hoppe at [email protected]
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