Barnsley-based Asos expected to post another half year loss as shoppers remain cash-strapped

The FTSE 250 company, which employs thousands of people at its giant warehouse in Barnsley where all of its products are sent for processing before being sent out for delivery to British customers, has seen its share drop by almost half since this time last year as a result, following two profit warnings in 2022.

However, the group’s stock has stabilised in recent months and has pushed forward with efforts to slash costs in order to bolster profitability.

Investors will be keen to see how its plans to return to profit have been unfolding when it updates the market with its figures for the past six months tomorrow.

Experts at AJ Bell said Asos is expected to a similar loss to the £16m deficit it posted a year ago.

However, the company is hoping its cost reductions will drag it to a profit for the full year, before the impact of any inventory write-downs.

This year, Asos said its turnaround plans aimed to drive £300m of profit and “cost mitigation measures” over the half-year.

This including moves to shut three storage warehouses in the UK, Europe and US, as well as trim office space and reduce its number of brands.

Cost-cutting became essential for the company after pressure on consumer budgets hit sales significantly over the past year.

Shareholders will be keen to see whether signs of easing inflation and higher wages are leading to any indications that sales could soon return to growth.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Poor weather dented sales on the high street in March, but online sales were more resilient which could bode well for the group’s performance, with shoppers overall a bit keener to spend than expected back in the autumn.

“The breadth of (Asos) value ranges should also be an advantage when consumers want to splash a bit of cash but are still being careful.”

Analysts have predicted that sales will drop by about three per cent to £1.95bn for the half-year.

It would represent an improvement after the group recorded a decline of eight per cent over the four months to December 31, as shoppers returned to stores and were cautious about deliveries amid disruption to postal services.

A week later, rival Boohoo will also provide its latest financial update after a similarly turbulent period of trading.