Finance
Fashion retailer ASOS' shares drop after disappointing profit outlook
Published by Global Banking and Finance Review
Posted on November 21, 2025
2 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 21, 2025
2 min readLast updated: January 20, 2026
ASOS shares dropped due to a disappointing profit forecast, despite a significant earnings increase. The company focuses on profitability amid competition.
By Pushkala Aripaka and Nithyashree R B
(Reuters) -ASOS shares fell sharply on Friday after the British fashion retailer's 2026 profit forecast came in below expectations, even though the company reported a jump in full-year earnings.
The online retailer has been working to revive its fast-fashion appeal among its core shoppers in their 20s, while focusing on strengthening profitability by cutting costs, against a backdrop of increased competition from Chinese rivals.
"We will not take shortcuts, we will not go back to excessive discounts, we will not go back to excessive promotion," CEO José Antonio Ramos Calamonte told journalists.
"We know the outcome of that is growth, but not sustainable growth," he said.
The company forecast adjusted core profit for fiscal 2026 between 150 million pounds and 180 million pounds ($196.22 million and $235.46 million).
At the midpoint of 165 million pounds, the profit outlook is below consensus of 173 million pounds, according to a company-compiled poll.
The group said it was on an "improving trajectory" for gross merchandise value after reporting a 51.5% jump in profit to 131.6 million pounds for the full year to August 31.
Analysts at J.P. Morgan noted ASOS' "strong progress" on profits, but said evidence of enough consumer re-engagement for sustainable and positive GMV growth was still limited.
ASOS shares fell as much as 11% to a low of 219.5 pence, and were down nearly as much by 1113 GMT at 222 pence.
In Britain, the group's biggest market, people are delaying non-essential purchases amid sticky inflation, and waiting for Black Friday discounts as well as next week's budget.
In fiscal 2025, ASOS' total customer numbers dropped 14% from the previous year. In the new fiscal year so far, ASOS had increased its new customer base in the UK by about 10%.
The group has more than 20 million active customers in over 200 markets.
(Reporting by Pushkala Aripaka and Nithyashree R B in Bengaluru; Editing by Rashmi Aich and Jane Merriman)
Gross merchandise value (GMV) is the total sales dollar value for merchandise sold through a company's platform over a given period, before deducting any fees or expenses.
Fast fashion is a retail strategy that focuses on rapidly producing high volumes of trendy clothing at low prices, allowing retailers to quickly respond to changing consumer demands.
Core profits refer to the earnings generated from a company's primary business operations, excluding any income from non-operational activities or one-time events.
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