Hosking Partners LLP on ASOS plc
Thesis
Hosking views ASOS as a multi-year operational turnaround rather than a mature business whose value is already obvious. Management is executing a recovery program that has been in progress for several years. The manager suggests that continued progress could produce substantial upside analogous to another British turnaround holding, Saga. Its language remains deliberately cautious, making successful execution central to the investment.
“ASOS management is delivering on a turnaround plan that has been many years in the making, and we are cautiously optimistic”
Key risks
- The turnaround has taken many years and could be delayed further.
- Execution of the management recovery plan is not yet fully established.
- Consumer discretionary weakness could pressure online apparel demand and margins.