What made U.K. online fashion retailer ASOS stock tank 20% today?

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Written on May 10, 2023

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ASOS plc says its loss widened on a year-over-year basis in fiscal H1.
Joshua Warner of City Index sees improving margins as a positive.
ASOS stock is now down more than 45% versus its year-to-date high.

Shares of ASOS plc (LON: ASC) tanked more than 20% on Wednesday after the online fashion retailer reported disappointing results for its fiscal first half.

ASOS stock down on widened loss

The British company cited exceptional costs attributed to its right-sizing plan and reported a hit to revenue and widened loss for H1 today.

Still, Joshua Warner – Market Analyst at City Index saw at least something positive in its interim results.

ASOS efforts to put the business back on the right course is impacting sales but is helping improve margins at a critical time.

Adjusted gross margin stood at 42.9% for the six months to February 28^th – down only 20 basis points from a year ago. ASOS stock is now down nearly 50% versus its year-to-date high.

ASOS H1 financial highlights

ASOS plc lost £290.9 million ($367.1 million) in the first half on £1.84 billion in revenue.

The U.K. stock is down because in H1 of last year, those numbers were reported at £15.8 million and £2.0 billion, respectively. According to CEO José Antonio Ramos Calamonte:

Initiatives are in place to drive a further £200 million of benefit in the second half and I’m very confident of our return to sustainable profit and cash generation in second half of the year and beyond.

Other notable figures in the company’s interim results include net debt that went up from £62.6 million to £431.7 million. Wall Street currently has a consensus “hold” rating on ASOS stock.