Dan Coatsworth, head of markets at AJ Bell, said: “A key tenet of the recent strategy at fast fashion online retailer Asos has been one of retrenchment as it looks to repair an ailing business and rebuild profitability.
“It appears what patience there was among investors is fast running out as the company’s full-year sales decline significantly more than expected.
“Guidance implying another year of lower sales to come isn’t doing much for the mood either.
“Having emerged from the pandemic with an unsustainable approach, it’s clear some progress has been made.
“Stale inventory has been cleared, the balance sheet has been rightsized, and costs have been brought under control.
“However, none of that can fully obscure the negative picture on demand, with the company facing increased competition and a downbeat consumer backdrop.
“Asos is trying through a combination of loyalty schemes and technology, using AI to generate outfit inspiration, to drive engagement with its target demographic.
“Until the market sees some signs that its efforts to win back shoppers are paying off, Asos may not get much credit for the underlying progress it has made.”
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