Asos shares rose by over a fifth this morning after the company posted a better than expected market update.
The e-commerce retailer told markets that it expects a “significant improvement in profitability” this year, adding that its own brand full-price sales have returned to growth.
Investors reacted positively to the news. Asos’ share price had risen by more than 20 per cent less than half an hour after the stock market opened.
“After a dreadful start to 2025 for the share price, Asos was primed for a relief rally if it could offer any sort of positive news.” AJ Bell investment director Russ Mould said.
“Today’s numbers represent an important first step on a long road to recovery, but the market will want to see some evidence eventually that metrics like active customers and orders are picking up when the company reports its first-half numbers in April to have real confidence in an Asos turnaround,” Mould added.
Asos’ share price has been on a steady downward track since the pandemic, losing 94 per cent of its value between July 2021 and March 2025.
The company has struggled with a general downturn in the e-commerce channel post-pandemic, which has also affected boohoo and Pretty Little Thing.
Last year, the number of active customers at Asos fell 16 per cent, with frequency of buys down 4 per cent, orders down 20 per cent.
“Improving profitability has been a key focus for the group, with successful efforts made to reduce inventory levels and allow Asos to operate from a more agile business model,” Shore Capital analysts Katie Cousins said.
Peel Hunt analysts said Asos looks to be “on track”.
“Nonetheless, with the shares down 30 per cent in the last month, there’s some catching up to do this morning”.
Peel Hunt upgraded its rating for Asos from Hold to Add, with the target price unchanged at 375p.
