By Andrea Figueras

Shares in ASOS slipped after the fashion retailer's guidance for fiscal 2026 disappointed analysts and raised concerns about its ability to fend off competition in an increasingly crowded market.

The U.K. online fashion group said it expects adjusted earnings before interest, taxes, depreciation and amortization in the range of 150 million to 180 million pounds ($196.1 million-$235.3 million) in the year through Aug. 31. Consensus currently stands in the upper half of this range at 173 million pounds, according to a poll of estimates provided by the company.

The retailer also said it expects an improving sales trend trajectory through the year, while its gross merchandise volume performance--a key topline indicator--should be between 3 and 4 percentage points ahead of its revenue performance.

Free cash flow is expected to be broadly neutral, which is also below consensus of 8 million pounds.

"Guidance for next year suggests ASOS is bracing for another year of sales decline," Panmure Liberum analysts Anubhav Malhotra and Wayne Brown wrote in a note to clients. "We remain concerned that significant challenges remain for ASOS as the competition in fast fashion, in omnichannel retail and in multibrand retailing has increased significantly," they added.

London-listed shares were down 2.4% at 241 pence in morning trading. Over the year to date, the stock has tumbled 46%.

ASOS is in the midst of a business reset, which started after Chief Executive Officer Jose Antonio Ramos Calamonte took the reins of the group in 2022.

"More investments may be required to improve brand awareness, which could weigh on returns," RBC Capital Markets analysts Richard Chamberlain and Manjari Dhar wrote in a research note.

The group narrowed its pretax loss to 281.6 million pounds for fiscal 2025 ended Aug. 31 from a loss of 379.3 million pounds in the prior year, though revenue dropped 15% to 2.48 billion pounds. Berenberg analysts argued that the full-year results showed no significant improvement in the constant-currency revenue decline, with an implied deceleration in the second half compared with the first six months.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

November 21, 2025 04:36 ET (09:36 GMT)

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