Asos has said it is "energised" by its performance in the current financial year, despite its revenue dropping by 16% annually.

The fashion brand recorded revenue of just over £2.9bn in the year to 1 September, while its adjusted EBITDA fell by 44% to £80.1m year-on-year.

Furthermore, the group’s loss before tax dropped further, from £296m to £373.3m.

However, Asos said it achieved its "key priorities for the year", completing a stock transition, with inventory down around 50% since the 2022 financial year, while also meeting its ‘back to fashion’ targets.

Chief executive officer at Asos, José Antonio Ramos Calamonte, said: "We achieved our key priorities for the year, significantly reducing our inventory position, while generating positive adjusted EBITDA and free cash flow. Following the year end, we further strengthened our balance sheet with our Topshop Topman joint venture and our refinancing.

"Our product is now in the strongest position it has been in years, with the right level of newness to excite customers, and we have fundamentally improved our profitability through a relentless focus on operational efficiency. With these solid foundations in place, we can focus on delivering experiences that delight our 20 million customers."

Looking ahead, Calamonte said there is "much work to do" but has already seen Asos’ new products sales increase by 24% year-on-year over the last three months, leaving him "energised by the progress" that the firm has made so far.

Asos now expects its gross margin in the 2025 financial year to improve by at least 300 bps to more than 46%, with an adjusted EBITDA growth of at least 60% to between £130m and £150m.

It has also predicted that revenue will be "within consensus range" and that in the mid-term, it will continue to generate a revenue and EBITDA margin of around 8%.

However, analysts were less convinced by the results.

Investment director at AJ Bell, Russ Mould, stated: "The headlines from Asos’ full-year results are terrible but if you look closely enough there are some signs the fallen fast fashion star is getting its act together.

"This is still not a particularly happy story. Active customers are down and the frequency and volume of orders are falling. But average basket sizes are up a touch – suggesting a strategy of focusing on more profitable orders is starting to gain some traction.

"There are concerns over whether younger age groups still like fast fashion when the more sustainable alternative of buying vintage gear is very much in vogue. Even getting close to reclaiming its past glories remains a very long way off for Asos. However, if the company can just get back on a sure footing it would be a good start."

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