British fashion and cosmetics retailer ASOS has delivered a total sales growth of £3.93bn ($4.45bn) for the fiscal year 2022 (FY22), which ended on 31 August.

The figure represents a 1% increase on a reported basis from £3.91bn in fiscal 2021 (FY21).

ASOS said the growth was driven by strong performance in its Topshop brand, which reported a 105% revenue growth in the UK, US and EU.

The company’s gross margin dropped by 180 basis points (bps) to 43.6% during the year, compared to 45.4% in FY21.

ASOS recorded an operating loss of £9.8m for the year, down by 105% from an operating profit of £190.1m in FY21.

Its adjusted earnings before interest and tax (EBIT) declined by 79% from £206.6m to £44.1m year-on-year, while its adjusted EBIT margin fell by 420bps from 5.3% to 1.1%.

The company posted a pre-tax loss of £31.9m, down from a profit of £177.1m a year earlier.

ASOS CEO José Antonio Ramos Calamonte said: “ASOS is a strong business with a compelling brand, customer offer and fashion credibility, with dedicated and passionate employees.

“Against the backdrop of an incredibly challenging economic environment, this unique combination has enabled our business to deliver a resilient performance this financial year in the UK – but I know we as a company can achieve far more.”

ASOS said it is taking action to reduce its spend and reviewing the phasing of its automation projects in Atlanta and Lichfield.

These developments follow a review of the company’s capital expenditure for FY23.

In addition, ASOS will write off £100m-£130m of its ‘out-of-fashion’ inventory in an effort to refresh its fashion offerings.

Ramos Calamonte described these moves as ‘a clear change agenda to strengthen ASOS over the next 12 months and reorient (its) business towards the future’.