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ASOS plc (GB:ASC)
LSE:ASC

ASOS plc (ASC) AI Stock Analysis

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ASOS plc

(LSE:ASC)

Rating:56Neutral
Price Target:
322.00p
▲(4.72%Upside)
ASOS plc's overall stock score reflects a challenging financial performance and valuation, offset by positive technical indicators and strategic initiatives. The strategic shift towards profitability and management changes are positive, but financial inefficiencies and sales challenges persist as significant concerns.
Positive Factors
Financial Performance
The company's EBITDA guidance for the fiscal year is consistent with market expectations, indicating financial stability.
Revenue Growth
ASOS own-brand full-price sales have returned to growth, with Test&React accounting for more than 15% of own-brand sales.
Strategic Initiatives
ASOS has made progress on strategic initiatives and reported a return to growth in ASOS Design.
Negative Factors
Operational Setbacks
The move to mothball the Atlanta DC represents a telling retreat for the business.
Profitability Challenges
Despite improvement, the EBITDA margin remains insufficient to reach overall profitability.
Revenue Decline
ASOS' revenue is down by 13% as previously indicated.

ASOS plc (ASC) vs. iShares MSCI United Kingdom ETF (EWC)

ASOS plc Business Overview & Revenue Model

Company DescriptionASOS Plc operates as an online fashion retailer worldwide. It offers womenswear and menswear products. The company sells its products under the ASOS Design, ASOS Edition, ASOS 4505, Collusion, Reclaimed Vintage, Topshop, Topman, Miss Selfridge and HIIT brands, as well as through third-party brands. It is also involved in the employer of marketing staff and payment processing businesses. The company was founded in 2000 and is headquartered in London, the United Kingdom.
How the Company Makes MoneyASOS plc generates revenue primarily through the sale of fashion and beauty products via its online platform. The company operates a direct-to-consumer model, selling its own branded products alongside items from third-party brands. Key revenue streams include retail sales from its website and mobile app, which are bolstered by a strong logistics network that enables efficient global distribution. ASOS also benefits from its ASOS Marketplace, a platform for independent brands and vintage boutiques, which contributes to its revenue. The company invests heavily in marketing, technology, and customer service to enhance customer experience and drive sales. Additionally, ASOS engages in strategic partnerships with various brands and influencers to expand its reach and appeal.

ASOS plc Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q2-2025)
|
% Change Since: -0.81%|
Next Earnings Date:Oct 15, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strategic shift towards sustainable and profitable growth, with significant improvements in profitability metrics and operational efficiency. However, challenges remain in growing sales and customer base, particularly in the US market and third-party brand performance.
Q2-2025 Updates
Positive Updates
EBITDA Improvement
Increased EBITDA by approximately £60 million compared to last year, indicating a 30% rise in variable contribution over the last six months.
Gross Margin Growth
Gross margin increased by almost 500 basis points due to a better full price mix and reduced discounting.
Own Brands Full Price Business Growth
ASOS's own brands saw growth in full price business globally, with ASOS Design in the UK growing by 9%.
Reduction in Supply Chain Costs
Supply chain costs were reduced by 20%, contributing to operational efficiency.
Successful Launch of Test & React
Test & React now constitutes 15% of own brand sales, with plans to increase to 20%. The model improved reaction to market trends and quality.
Cost Efficiency and Stock Turn Improvement
Implemented cost management discipline and accelerated stock turn by 35%, allowing better capital use.
Loyalty Program Introduction
ASOS launched the ASOS.WORLD loyalty program, aiming to enhance customer engagement and retention.
Negative Updates
US Market Sales Decline
Sales in the US dropped by 28% due to reduced stock, promotions, and performance marketing, despite an increase in variable contribution.
Overall Sales Decline
Adjusted constant currency sales declined by 13% year-on-year, reflecting reductions in unprofitable performance marketing and inventory.
Challenges in Active Customer Growth
Experiencing declines in active customers due to reduced product availability, promotions, and marketing investment.
Third-Party Brand Performance
Sales performance of third-party brands was weaker, although profitability improved.
Company Guidance
In the call, ASOS provided guidance on their performance and strategic direction, highlighting several key metrics. The company reported an increase in EBITDA by approximately £60 million compared to the previous year, indicating significant progress in their strategic initiatives. This improvement was driven by a 490 basis point increase in gross margin and a focus on cost efficiencies. The company emphasized the success of their new commercial model, which led to a full price business growth of 12 points compared to last year and a 35% acceleration in stock turn. ASOS also noted a reduction in supply chain costs by 140 basis points and a decrease in the underlying return rate by 150 basis points. Despite a 13% year-on-year decline in adjusted constant currency sales, the company's efforts to improve profitability are evident. Looking ahead, ASOS expects gross margins to surpass 46% and adjusted EBITDA to grow at least 60%, reaching between £130 million and £150 million for FY 2025. They also aim for a return to revenue growth, supported by the scaling of their Flexible Fulfillment models. Additionally, ASOS anticipates meaningful free cash flow inflow in FY 2026, driven by continued improvements in their operating model and gross margins.

ASOS plc Financial Statement Overview

Summary
ASOS plc faces significant financial challenges with declining revenues and profitability. The income statement shows negative trends with net losses, while the balance sheet reveals high leverage and declining equity. However, there is some improvement in cash flow with positive operating cash flow in 2024, although free cash flow still concerns due to net income losses.
Income Statement
35
Negative
ASOS plc has faced declining revenues and profitability over the past few years. The revenue decreased from 2023 to 2024, marking a significant drop from previous years. The company has also experienced negative EBIT and EBITDA margins, reflecting operational inefficiencies and increased costs. Despite a strong revenue base, the ongoing net losses are concerning and indicate a need for strategic adjustments.
Balance Sheet
45
Neutral
The balance sheet shows a moderate level of financial stability with a high debt-to-equity ratio and declining equity base. ASOS has a substantial amount of total debt compared to its stockholders' equity, which may pose challenges in managing financial obligations. However, the company maintains a reasonable cash balance, providing some liquidity cushion.
Cash Flow
50
Neutral
ASOS's cash flow performance has shown improvement in operating cash flow, turning positive in 2024 after a negative trend in previous years. The free cash flow has also improved, although it still remains a concern due to the company's net income losses. Effective cash management will be crucial to sustain operations and facilitate strategic investments.
BreakdownTTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue2.69B2.90B3.54B3.94B3.91B3.26B
Gross Profit1.07B1.08B1.39B1.57B1.64B1.43B
EBITDA-123.00M-153.60M-79.50M140.90M325.80M278.10M
Net Income-294.30M-338.70M-223.10M-30.80M128.40M113.30M
Balance Sheet
Total Assets2.18B2.27B2.63B3.00B2.88B1.99B
Cash, Cash Equivalents and Short-Term Investments92.00M382.90M353.30M323.00M662.70M407.50M
Total Debt329.60M977.70M1.00B856.00M792.10M313.10M
Total Liabilities1.26B1.75B1.76B1.98B1.85B1.18B
Stockholders Equity924.10M521.30M866.70M1.01B1.03B810.30M
Cash Flow
Free Cash Flow87.10M160.30M-190.60M-313.50M52.60M279.20M
Operating Cash Flow96.20M196.70M-12.70M-130.60M209.70M395.80M
Investing Cash Flow40.20M-133.50M-177.90M-182.90M-443.50M-116.60M
Financing Cash Flow-248.40M-26.00M222.70M-26.30M489.10M143.70M

ASOS plc Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price307.50
Price Trends
50DMA
306.53
Positive
100DMA
309.51
Negative
200DMA
354.58
Negative
Market Momentum
MACD
-0.70
Positive
RSI
49.08
Neutral
STOCH
55.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ASC, the sentiment is Neutral. The current price of 307.5 is below the 20-day moving average (MA) of 311.30, above the 50-day MA of 306.53, and below the 200-day MA of 354.58, indicating a neutral trend. The MACD of -0.70 indicates Positive momentum. The RSI at 49.08 is Neutral, neither overbought nor oversold. The STOCH value of 55.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:ASC.

ASOS plc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
£1.34B6.822.95%-10.46%396.13%
64
Neutral
£727.97M890.75%0.45%5.32%-152.26%
GBAO
63
Neutral
£546.74M52.516.87%-0.39%2.68%
61
Neutral
C$5.16B10.9218.94%4.26%5.08%6.52%
GBTHG
58
Neutral
£524.42M-27.20%-14.37%-28.78%
GBASC
56
Neutral
£366.99M-62.59%-15.86%-18.46%
48
Neutral
£281.26M-96.36%-16.32%-202.39%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:ASC
ASOS plc
307.50
-55.30
-15.24%
GB:DEBS
boohoo group Plc
21.85
-12.89
-37.10%
GB:AO
AO World
96.10
-16.50
-14.65%
GB:CURY
Currys plc
122.40
47.85
64.19%
GB:THG
THG
34.00
-30.20
-47.04%
GB:MOON
Moonpig Group Plc
220.50
34.92
18.82%

ASOS plc Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
ASOS Appoints Aaron Izzard as New CFO Amid Strategic Transition
Positive
Jun 17, 2025

ASOS has announced a significant leadership transition with Aaron Izzard appointed as the new Chief Financial Officer and Executive Director, effective from July 1, 2025. This change marks a strategic move as ASOS transitions from financial recovery to a focus on sustained operational execution and long-term growth. Aaron’s extensive experience in retail and e-commerce, particularly in driving cost-efficiency and operational improvements, positions him as a key asset for ASOS’s continued transformation. The outgoing CFO, Dave Murray, is recognized for his contributions to the company’s financial strengthening and stock reduction, leaving ASOS in a more robust and resilient state.

The most recent analyst rating on (GB:ASC) stock is a Hold with a £4.60 price target. To see the full list of analyst forecasts on ASOS plc stock, see the GB:ASC Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
ASOS plc Announces Change in Major Holdings
Neutral
May 6, 2025

ASOS plc has announced a change in its major holdings, with Aktieselskabet af 5.5.2010 and Nine United Properties UK Ltd. increasing their voting rights to 29.012157%. This acquisition of voting rights reflects a slight increase from the previous position and indicates a consolidation of influence by entities associated with Anders Holch Povlsen. This development could impact ASOS’s strategic decisions and stakeholder dynamics, given the significant voting power now held by these entities.

Regulatory Filings and Compliance
ASOS PLC Announces Change in Voting Rights Structure
Neutral
May 6, 2025

ASOS PLC has announced a change in the breakdown of its voting rights, with Aktieselskabet af 5.5.2010 and Nine United Properties UK Ltd. being the entities involved. The notification indicates that the total voting rights held by these entities have slightly decreased from 29.032636% to 28.993269%, which may impact the company’s governance dynamics and stakeholder influence.

Regulatory Filings and Compliance
ASOS Announces Total Voting Rights Update
Neutral
May 1, 2025

ASOS Plc has announced that, as of May 1, 2025, its issued and fully paid share capital consists of 119,519,975 ordinary shares, each with a nominal value of 3.5 pence and one voting right per share. This total number of voting rights should be used by shareholders to determine their notification requirements under FCA Disclosure and Transparency Rules. This announcement provides clarity on the company’s share structure, which is crucial for shareholders in managing their investments and ensuring compliance with regulatory requirements.

Business Operations and StrategyFinancial Disclosures
ASOS Reports Profitability Transformation Amid Strategic Initiatives
Positive
Apr 24, 2025

ASOS plc has reported a significant transformation in profitability for the first half of the fiscal year 2025, driven by a new commercial model and cost discipline. Despite a 13% decline in adjusted group revenue, the company achieved a positive adjusted EBITDA of £42.5 million, a notable improvement from the previous year’s loss. The company’s strategic initiatives, including the scaling of its Test & React model and the introduction of new brands, have contributed to a 9% increase in ASOS Design sales in the UK. ASOS is also enhancing its US market proposition and expects continued growth in full-price sales and profitability in the coming years.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 17, 2025