Published by Global Banking & Finance Review®
Posted on September 30, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleASOS warns of revenue shortfall, leading to an 11% drop in shares. The company focuses on cost-saving measures amid competition and remains confident in future profit expectations.
(Reuters) -British online fashion retailer ASOS warned on Tuesday that annual revenue would fall short of market expectations due to weak consumer demand, with profit expected to land at the lower end of its forecast range.
Shares in the London-listed firm dropped 11% in early trade, taking losses for the year so far to more than 40%.
ASOS has been working to revive its fast-fashion appeal among its core base of shoppers in their 20s, while cutting costs amid intensifying competition from Chinese rivals and the impact of U.S. trade tariffs.
Britain is ASOS's biggest market, but the U.S. accounts for about 10% of total sales.
The company had previously forecast an adjusted core profit of between 130 million pounds and 150 million pounds ($175 million to $201 million).
Nonetheless, ASOS said profit was still expected to rise more than 60% from a year earlier, driven by cost discipline and improved margins.
ASOS said revenue would come in slightly below market expectations. Analysts on average had expected the company's total sales to fall 8.4% on a constant currency basis for the fiscal 2025.
Gross merchandise value is also seen lower than expected as it prioritises "higher quality sales".
Analysts at J.P. Morgan said they continued to see questions on brand equity into the mid-term, and "struggle to become more constructive, despite some of the strategic steps forward".
ASOS, however, said it remained confident that its fiscal 2026 profit and free cash flow would be in line with market expectations.
The group pointed to "meaningful" cost-saving measures implemented between March and September that are expected to benefit the new financial year.
($1 = 0.7447 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Mrigank Dhaniwala, Subhranshu Sahu and Louise Heavens)
A revenue shortfall occurs when a company's actual revenue is less than its projected or expected revenue, indicating weaker performance than anticipated.
Profit margin is a financial metric that shows the percentage of revenue that exceeds the costs of goods sold. It indicates how efficiently a company is generating profit.
Gross merchandise value (GMV) refers to the total sales dollar value for merchandise sold through a company's platform over a given period, before deducting any fees or returns.
Cost-saving measures are strategies implemented by a company to reduce expenses and improve profitability, often involving budget cuts or operational efficiencies.
Brand equity refers to the value added to a product or service by having a well-known brand name, which can influence consumer perceptions and purchasing decisions.
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