ASOS PLC (LSE:ASC) shares headed lower again after the online fashion retailer confirmed much larger losses for the past year and painted a mixed picture of progress with its "driving change" initiatives expected to result in slow sales continuing in the current year.
A loss before tax of £296.7 million was posted for the year to 3 September compared to a £31.9 million loss the prior year, while net debt swelled 166% to £319.5 million.
The outlook for the new financial year points to significant downgrades as the company pushes through measures that aim to return it to revenue growth and pre-Covid profit margins in 2025.
It is looking to return to its fashion-centric origins and "strengthen our relationship with consumers" via a £30 million incremental investment in marketing and a big discounting push to get rid of old stock.
This means for the coming 2024 financial year, management expects sales to decline 5-15%, with the trend of high double-digit declines seen in the past quarter continuing through the first half and a return to growth not anticipated until the final quarter.
It expects to generate positive underlying profit (adjusted EBITDA) and positive cash generation to reduce the net debt position.
Chief executive José Antonio Ramos Calamonte said the company ended the past year as "a smaller but more resilient business and remains one of the leading players in online 20-something fashion.
"While the market has evolved and our model has adapted accordingly, we mustn't lose sight of our core purpose. Our strength in the past came from our relentless focus on bringing the most exciting fashion to consumers with a focus on inspiration and style. By doubling down on that winning formula and evolving our culture to place speed at the heart of everything we do, we can win again."
The shares fell over 8% to 362.20p in early trading.