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1. Company Snapshot

1.a. Company Description

ASOS Plc operates as an online fashion retailer worldwide.It offers womenswear and menswear products.The company sells its products under the ASOS Design, ASOS Edition, ASOS 4505, Collusion, Reclaimed Vintage, Topshop, Topman, Miss Selfridge and HIIT brands, as well as through third-party brands.


It is also involved in the employer of marketing staff and payment processing businesses.The company was founded in 2000 and is headquartered in London, the United Kingdom.

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1.b. Last Insights on ASC

Recent headwinds for ASOS Plc include concerns over commodity demand and domestic consumption in key international markets, weighing heavily on the UK market. The company's significant private companies ownership may influence key decisions, potentially impacting its growth strategy. Additionally, ASOS' plans to suspend operations at its Atlanta distribution centre in H2 FY25 may lead to short-term disruptions and added costs. The company's efforts to revamp its global distribution and enhance US operations may be overshadowed by these challenges, at least in the near term.

1.c. Company Highlights

2. ASOS Delivers on Transformation, Eyes Growth

ASOS reported a 12% year-over-year decline in Gross Merchandise Value (GMV) to £3.9 billion, but its gross margin expanded by 370 basis points due to a higher full-price mix and reduced discounting. The company's adjusted EBITDA improved by £50 million to £132 million. The actual EPS came out at -£0.36, missing estimates of -£0.1162. Revenue decline was in line with expectations, with analysts estimating a -0.8% revenue growth for the next year.

Publication Date: Nov -25

📋 Highlights
  • Inventory & Debt Reduction:: Cut stock to £400M (from £1.1B) and reduced debt by 40%, unlocking £118M in inventory benefits and £112M net debt reduction.
  • EBITDA & Profit Growth:: Achieved over 60% EBITDA increase and 30% higher profit per order, with FY '25 adjusted EBITDA at £132M.
  • AI & Customer Engagement:: AI Stylist boosted saved items by 50%, while ASOS Live saw 50% higher consumer interactions and improved conversions.
  • Refinancing Benefits:: Secured £87.5M liquidity headroom, 5-year debt extension to 2030, and annual interest savings of £5M via refinancing.
  • Free Cash Flow Outlook:: Projected GBP 150–180M adjusted EBITDA in FY '26, targeting structural free cash flow positivity with 3–4% CapEx of sales.

Operational Efficiency

The company achieved significant operational efficiencies, reducing its cost to serve by 130 basis points and unlocking 100 basis points of efficiency improvements through supply chain and other projects. ASOS also reduced its inventory by £118 million and improved its net debt by £112 million, resulting in a net interest benefit.

Refinancing and Future Plans

ASOS refinanced its debt, extending the term to 2030, increasing liquidity headroom by £87.5 million, and reducing interest rates, which is expected to deliver cash interest benefits of around £5 million. The company expects to accelerate its GMV growth in FY '26, with a gross margin expansion of at least 100 basis points above 48%, and adjusted EBITDA between £150 million and £180 million.

Valuation and Metrics

With a P/S Ratio of 0.1 and an EV/EBITDA of -6.3, the market seems to have priced in the company's challenges. However, the Free Cash Flow Yield of 32.99% suggests that the company may be undervalued. The ROE and ROIC are negative, indicating that the company's profitability is still a concern.

Customer Engagement and AI

ASOS is focusing on enhancing customer engagement through AI-powered personalization, with its AI Stylist tool increasing saved items by 50%. The company is partnering with Microsoft to develop this technology further, which is expected to drive growth and improve customer experience.

Growth Prospects

With a new product offer and improved customer engagement, ASOS expects to accelerate its GMV growth in FY '26. The company's focus on premium brands, such as ARKET and Good American, is also expected to drive growth. The management is confident in its plans to deliver growth and meaningful free cash flow positive generation.

3. NewsRoom

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ASOS PLC (ASOMF) Full Year 2025 Earnings Call Highlights: Strategic Refinements Drive ...

Nov -26

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What The Latest Analyst Shifts Mean For ASOS's Story and Valuation

Nov -25

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ASOS Shares Slip After Guidance Misses Views

Nov -21

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UK Market: NIOX Group And Two Other Stocks Estimated Below Intrinsic Value

Sep -29

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An Intrinsic Calculation For ASOS Plc (LON:ASC) Suggests It's 50% Undervalued

Sep -24

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Barclays (LSE:BARC): Evaluating the Valuation Picture After Strong Share Price Gains

Sep -09

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Angle PLC Announces Change of Adviser

Sep -09

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Burberry to reclaim FTSE 100 spot as Taylor Wimpey and Unite drop out

Sep -04

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.81%)

6. Segments

Retail

Expected Growth: 1.8%

ASOS Plc's 1.8% retail growth is driven by increasing online penetration, particularly among younger demographics. Strong brand recognition, competitive pricing, and efficient logistics enable fast delivery and returns. Additionally, the company's focus on sustainability, diversity, and inclusivity resonates with customers, contributing to its growth momentum.

Delivery Receipts

Expected Growth: 2.2%

ASOS Plc's 2.2% growth in delivery receipts is driven by increasing online shopping penetration, effective marketing strategies, and a strong brand presence. Additionally, the company's focus on fast fashion, celebrity collaborations, and a seamless online shopping experience have contributed to the growth. Furthermore, ASOS's ability to adapt to changing consumer behavior and preferences has also played a significant role in driving delivery receipts.

Wholesale

Expected Growth: 1.5%

ASOS Plc's wholesale segment growth of 1.5% is driven by increasing demand for online fashion, expansion into new markets, and strategic partnerships with influencers and brands. Additionally, the company's focus on sustainability, quality, and competitive pricing also contribute to its growth. Furthermore, ASOS's efficient supply chain and logistics management enable it to meet growing customer demand, supporting its wholesale business expansion.

Premier Subscription

Expected Growth: 2.5%

ASOS Premier Subscription's 2.5% growth is driven by increasing customer loyalty, enhanced personalized services, and streamlined logistics. The subscription model provides customers with unlimited next-day delivery, early access to sales, and exclusive discounts, fostering a loyal customer base. Additionally, ASOS's data-driven approach and AI-powered styling tools improve customer engagement, leading to increased retention and growth.

Marketing and Other Services

Expected Growth: 1.9%

ASOS Plc's 1.9% growth in Marketing and Other Services is driven by increasing online presence, effective social media campaigns, and strategic partnerships. Additionally, the company's focus on customer experience, personalized marketing, and data-driven insights have contributed to this growth. Furthermore, ASOS's expansion into new markets and investment in digital marketing tools have also played a significant role.

7. Detailed Products

Women's Fashion

ASOS offers a wide range of women's fashion products, including clothing, shoes, accessories, and beauty products.

Men's Fashion

ASOS provides a diverse range of men's fashion products, including clothing, shoes, accessories, and grooming products.

ASOS Design

ASOS Design is the company's in-house fashion brand, offering high-quality, on-trend clothing and accessories at affordable prices.

ASOS Marketplace

ASOS Marketplace is a platform that allows independent sellers to list and sell their products, offering a unique and diverse range of items.

ASOS Beauty

ASOS Beauty offers a curated selection of beauty products from popular brands, including skincare, makeup, and haircare.

ASOS Face + Body

ASOS Face + Body is the company's own beauty brand, offering a range of affordable, cruelty-free, and vegan-friendly products.

8. ASOS Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

ASOS faces moderate threat from substitutes as customers have limited alternatives for online fashion shopping. However, the rise of social media influencers and celebrity-backed fashion lines could pose a threat.

Bargaining Power Of Customers

ASOS customers have high bargaining power due to the ease of switching to competitors and the availability of similar products from other online retailers.

Bargaining Power Of Suppliers

ASOS has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations also gives it negotiating power over suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the online fashion market, including the need for significant investment in technology, logistics, and marketing.

Intensity Of Rivalry

The online fashion market is highly competitive, with many established players competing for market share. ASOS faces intense rivalry from companies like Boohoo, Zara, and H&M.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.61%
Debt Cost 6.57%
Equity Weight 55.39%
Equity Cost 17.47%
WACC 12.61%
Leverage 80.55%

11. Quality Control: ASOS Plc passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
About You

A-Score: 4.7/10

Value: 6.5

Growth: 6.3

Quality: 2.7

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Fastned

A-Score: 3.4/10

Value: 4.8

Growth: 5.2

Quality: 2.2

Yield: 0.0

Momentum: 5.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
ASOS

A-Score: 3.0/10

Value: 9.6

Growth: 2.2

Quality: 2.8

Yield: 0.0

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
THG

A-Score: 2.7/10

Value: 8.1

Growth: 2.2

Quality: 2.9

Yield: 0.0

Momentum: 2.5

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Boohoo

A-Score: 2.7/10

Value: 6.5

Growth: 1.2

Quality: 2.1

Yield: 0.0

Momentum: 3.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Cnova

A-Score: 1.9/10

Value: 8.0

Growth: 0.8

Quality: 2.6

Yield: 0.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.58$

Current Price

2.58$

Potential

-0.00%

Expected Cash-Flows