Asos has recorded a 13% annual drop in revenue in the 26 weeks to 2 March, falling to £1.29bn.

Despite the fall, the online fashion retailer's adjusted loss before tax improved by 50.5%, now standing at £69.5m, which it stated was driven by a "new commercial model and sustained cost discipline".

Furthermore, Asos Design saw total sales jump by 9% in the UK, which it said helped to grow market share.

Following changes to its global distribution model, Asos said its US customers are now accessing a greater product range via UK fulfilment. In the second half of its financial year, the firm said that its full hybrid US model will be in operation.

Chief executive officer at Asos, José Antonio Ramos Calamonte, said: "H1 FY25 is the strongest sign yet that our new commercial model is working. We are driving a significant transformation in profitability, with positive adjusted EBITDA up by c.£60m year-on-year.

"Customers are responding positively to our focus on full-price sales, speed to market, and quality, resulting in a 9% year-on-year increase in Asos Design sales in the UK, and positive momentum with our partner brands. Importantly, these successes have been achieved whilst maintaining strong cost control and improving our inventory health."

Looking ahead, Asos has reiterated its profitability guidance for the 2025 financial year, with EBITDA set to increase by at least 60% to between £130m and £150m. This is being driven by a “significant increase” in its full-price sales mix.

It also expects its revenue to be towards the "bottom end" of its consensus range, which was set between declines of 2% and 9% at the start of its current financial year.

Equity analyst at Hargreaves Lansdown, Aarin Chiekrie, commented: “Asos is on its way to delivering exactly what investors want – better profitability. Don’t worry too much about the double-digit sales decline for now. It’s part of the strategic shift, as Asos chose to remain firmer on pricing by not moving as many items to the sales racks during the period.

"While that’s making for some tough comparable sales numbers, profitability is starting to reap the benefits, with underlying cash profits landing well ahead of last year.

"There is still a long way to go and a lot of challenges to navigate as Asos looks to turn its fortunes around. Active customer numbers and order numbers are still heading in the wrong direction. That’s partly due to the reduction in discounting activity and the shift in focus away from less profitable customers."

---