ASOS PLC (LSE:ASC) interim results showed a clear focus on profitability over revenue growth and signs of its "path to recovery", analysts said.
The online retailer, reported a smaller loss in the first half of the year but dampened down expectations for full-year revenue growth.
Deutsche Bank said adjusted EBITDA of £42.5 million was below its forecast of £62 million but full-year guidance of £130-150 million was maintained.
"Whilst profitability is being managed very well, the outlook for FY revenue is at the lower end of the consensus range (-2% to -9% and DBe -3%) given weak underlying markets, reduction in discounted sales and a prudent marketing budget," the Deutsche analysts said.
"Importantly, the areas of most management focus are seeing sales improvements, and the remainder of the business should follow.
"Overal,l we see signs of progress and management is delivering on its plan, but we sense some investors would like to see revenue growth," the German bank added, retaining its 'buy' recommendation and 450p price target.
At Shore Capital, analysts noted that the Topshop/Topman websites have relaunched with a "coming soon" message, after the group entered a joint venture with Bestseller owner Heartland last September, leaving ASOS with a 25% stake.
At Peel Hunt, the feeling was that these were "solid" interims, "with a clear focus on profitability over revenue growth".
Adjusted EBITDA was slightly ahead of its £41.5 million forecast, even though revenue fell by 13% to £1.3 billion as active customers fell 16%.
Absolute gross profit decreased 3%, reflecting a big improvement in the gross margin.
"Fixed costs were held broadly flat, resulting in a 30% increase in contribution. ASOS is now a much more profitable venture, targeting mid-term EBITDA margins of 8%," the Peel analysts said.
"There is no change to wider guidance today, as the focus shifts from recovery to growth.
"The closure of the US warehouse has led to non-cash write-downs, but the switch to UK fulfilment has doubled the US fashion assortment. Much of this consists of test-and-repeat own-brand exclusives, driving a double-digit improvement in the US run rate.
"Overall, while ASOS is still some way off delivering revenue growth, it has created a stable and profitable base to build from," the Peel analysts concluded, reiterating their 'add' rating.