ASOS rally as clothes mountain shrinks

FALLEN ASOS shares were today lifted by signs that the fast fashion retailer has made inroads tackling a mountain of excess stock.

Shares rallied 8% after chief executive José Antonio Ramos Calamonte hailed ongoing progress making ASOS “a faster and more agile business”.

He said his year-end target to get inventory that built up during the pandemic back down to £600 million remained on track, adding that new ranges have been well received.

Sales fell 18% in the 26 weeks to 3 March but this was broadly in line with guidance as the right-sizing of stock levels leads to the best cash flow performance since 2017.

Fuelled by the chief executive’s vow to make ASOS a “more profitable, cash generative business” from 2025, the stock lifted 27.4p to 373.6p in the FTSE All-Share. That compares with more than 750p a year ago, having slumped from 4,000p seen during the pandemic.

The ASOS recovery provided one of the highlights in a session when the FTSE 100 index fell 7.38 points to 7910.19 and the FTSE 250 index edged up 20.03 points to 19,633.56.

London’s top flight was led by B&Q and Screwfix owner Kingfisher, which put on another 8.7p to 248.3p despite yesterday’s weaker annual results.

Shares in industrial conglomerate Smiths also added 16.6p to 1670.6p after it posted a 5.3% rise in half-year operating profits and named the boss of its detection business as successor to chief executive Paul Keel.

The worst performing blue-chip stocks included Auto Trader, which fell 5% or 36.6p to 705.6p, and Vodafone with a retreat of 0.85p to 67.5p.

In the FTSE 250, results by IT services firm Softcat and drinks maker AG Barr helped their shares improve 5% through gains of 70p to 1556p and 24p to 538p respectively.

Engineering consultancy Wood Group fell 3% or 4.2p to 144p, despite upgrading its 2024 outlook after the first year of its three-year growth strategy.

And recently-listed CAB Payments fell 4.6p to 101p on the back of maiden annual results by the Crown Agents Bank business. It listed at 335p in June’s float worth £851 million.