ASOS PLC Shares Drop After Earnings Outlook Misses Expectations

ASOS PLC (LSE: ASOS) experienced a significant decline in its share price on Tuesday, falling approximately 8 % to a closing price of £3.02. The drop followed the company’s announcement that full‑year earnings would lie at the lower end of the guidance range and that revenue would miss market expectations.

Earnings and Revenue Guidance

  • Adjusted EBITDA: The firm projects adjusted EBITDA in the lower portion of its guidance band of £130 million to £150 million for the year ended 31 March 2025.
  • Revenue: Forecast revenue is expected to fall short of analyst estimates, driven by persistent weakness in consumer demand and heightened competitive pressure.
  • Profit Outlook: Management confirmed that the company’s full‑year profit would be on the lower side of its previously issued guidance.

Operational Adjustments

ASOS cited several cost‑cutting measures as part of its ongoing transformation plan:

  • Renegotiation of supplier contracts to secure more favourable terms.
  • Mothballing one of its fulfilment centres to reduce operating expenses.

Transformation Strategy

The board has outlined a three‑stage turnaround:

  1. Legacy Cleanup: Addressing the excesses of its former business model.
  2. Commercial Foundation: Building a leaner, more efficient commercial structure.
  3. Customer Re‑engagement: Reconnecting with consumers through improved product assortment and digital experience.

Analyst Sentiment

  • RBC: Rated the stock Neutral.
  • JEFFERIES: Assigned a Hold rating.

Market Context

  • Market Capitalisation: £36.095 billion.
  • 52‑Week Range: The share price has moved from a low of £2.23 on 18 March 2025 to a high of £4.56 on 26 December 2024, reflecting heightened volatility amid the company’s restructuring efforts.

ASOS remains a significant player in the consumer discretionary, internet‑and‑catalog retail sector, but the current financial outlook signals continued challenges in generating robust sales growth and meeting investor expectations. The company’s ability to execute its transformation plan will be closely monitored by market participants as it seeks to return to a path of sustainable profitability.