Asos has made "baby steps" in its recovery, according to AJ Bell, after the fashion firm published a trading update for the six months to 1 March.

The online retailer stated that its earnings increased by 50% year-on-year, including the negative impact of IEEPA tariffs, driven by an improved 48.5% gross margin, lower returns rate and continued cost discipline.

However, in this period, Asos recorded a 9% year-on-year drop in its gross merchandise volume (GMV), although there were sequential quarterly improvements of four percentage points between Q4 2025 and Q1 2026, followed by a two-percentage point increase in Q2.

The firm added that its UK market, which is the largest of its four markets, outperformed the rest of the group, delivering a drop in GMV of 5% year-on-year.

Chief executive officer at Asos, José Antonio Ramos Calamonte, said: "Our first half shows continued progress on executing our strategic priorities.

“The enhancements we have made to the customer experience, including our revitalised app, are helping people to find not just items, but outfits, styled just for them. We are seeing improvements in new customer growth and strong performance in our womenswear business, both of which are encouraging lead indicators for sales growth.”

In its outlook, the online fashion retailer expects its GMV to “show an improving trajectory” throughout the year, and is set to land between three and four percentage points ahead of revenue.

Its gross margin is expected to improve by at least 100 bps to between 48% and 50%, while it earnings guidance has been placed between £150m and £180m.

Following this announcement, shares in Asos jumped by over 11%.

Head of markets at AJ Bell, Dan Coatsworth said that Asos has continued to travel the road to recovery, although its journey is "far from complete", with its latest results being "baby steps" to get back on top.

He concluded: "A big increase in gross margins is encouraging, as is a reduction in the number of orders being returned. Holding Asos back is ongoing weakness with topline sales. It suggests it needs to dig deeper into its bag of magic tricks to drive momentum in the business.

"Despite the shares bumping higher on the trading update, the longer-term trend paints a difficult picture. Fundamentally, the market has yet to be convinced by Asos’ comeback attempts, with the share price yesterday having hit its lowest level since October 2008."

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