LONDON (Reuters) – ASOS reported a 14% drop in quarterly revenue on Thursday but assured that its new strategy was starting to pay off and was enabling it to return to profitability, pushing up the group’s stock market share.
The online fashion retailer, which announced a major restructuring last October, has implemented a strategy focused on profitability rather than revenue growth by reorganizing the supply chain, cutting costs and by strengthening innovation.
For the third fiscal quarter ended at the end of May, ASOS announced an increase in its adjusted operating profit (Ebit) of more than 20 million pounds (23.38 million euros) and said it had returned to profitability, without publishing the total quarterly figure.
The operating margin increased by 250 basis points, putting the group on track to achieve its objective of a 200 basis point improvement for the second half.
“We are carrying out our business turnaround plan: scaling our inventory, generating cash, reducing our net debt and structurally improving our profitability,” Chief Executive José Antonio Ramos Calamonte said.
On the London Stock Exchange, the title ASOS climbed 14.3% at 08:30 GMT.
ASOS also maintained its forecast of an adjusted Ebit of 40 to 60 million pounds for the second half.
(Report James Davey, Augustin Turpin, edited by Blandine Hénault)
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