ASOS has reported a sharp improvement in profitability in the first half of its financial year, with adjusted EBITDA rising roughly 50% year-on-year despite headwinds from US tariffs.
The online fashion retailer said gross merchandise value fell 9% over the six months to 1 March 2026, but there have been signs of improvement, with GMV increasing by 4 percentage points between the fourth quarter of 2025 and the first quarter of 2026, and by a further 2 percentage points in the second quarter.
The UK, its biggest market, outperformed the group with GMV down just 5% in the first half.
But the top line isn’t really the main story here. It’s how well ASOS has got its house in order to ensure it doesn’t squander any sales stability.
Encouragingly, margins continued to strengthen, with adjusted gross margin rising 330 basis points to 48.5%, helped by the rollout of its newer commercial and flexible fulfilment models.
Returns rates dropped by around 160 basis points after the company took steps to improve product transparency for customers and cut off customers who persistently made returns.
There were encouraging signs on customer acquisition too, with new customers across its four core markets growing 2% year-on-year.
Womenswear saw a roughly ten percentage point swing in its growth rate compared with the second half of last year, with categories like outerwear, evening dresses, and tops all delivering GMV growth.
Cost discipline remained tight, with fixed costs cut by more than 10% and supply chain costs improving a further 150 basis points, largely through warehouse efficiencies and renegotiated UK distribution contracts.
ASOS reiterated its full-year guidance of EBITDA between £150m and £180m, gross margin improvement of at least 100 basis points to 48-50%, and broadly neutral free cash flow. The company expects GMV trends to keep improving through the year.
ASOS recovery looks to be progressing.