Asos released its 2025 full year results, with sales declining for the third consecutive year. Shares fell 7% after the announcement. Despite a 3.7% year-over-year improvement in gross margin, Asos continues to post operating losses. The company’s operational performance remains weak, with active customers, average order frequency, and total shipped orders declining.

While Asos secured GBP 237.5 million in refinancing, reducing interest payments by GBP 5 million, doubts linger about a turnaround. The company’s spending on marketing and capital investments may not be enough to regain a competitive position in the fashion retail market. Asos remains undervalued, trading in a 5-star territory, with shares rallying on the refinancing news.

Investors are cautious about Asos’ future due to its history of disappointing results. Uncertainty remains high in the intensely competitive fashion retail industry. As the company guides to a 1% increase in gross margin for 2026 and an adjusted EBITDA range of GBP 150 million-GBP 180 million, the shift in primary top-line metric from revenue to gross merchandise value reflects a focus on flexible fulfillment models.

Read more at Morningstar: Asos Earnings: Revenue Downtrend Persists Despite Narrowing Operating Losses