Chelsea recorded a loss of nearly £100million for the year ending June 30.
The loss was revealed in the club's latest financial results but, after two profitable years, the Blues insisted they are still compliant with UEFA's Financial Fair Play regulations.
Turnover grew marginally to £446.7million, and the club cited a lack of Champions League football, costs associated with changing manager and a record outlay on players Kepa Arrizabalaga, Christian Pulisic, Mateo Kovacic and Jorginho for the £96.6m loss.
Chairman Bruce Buck said on chelseafc.com : "Consistent revenue growth and careful financial management over recent seasons has allowed the club to make significant levels of investment in the playing staff whilst maintaining compliance with UEFA Financial Fair Play regulations.
"This has contributed to another Europa League victory at the end of the 2018-19 season and a return to the highest level of European competition.
"This solid commercial foundation, allied to a young and exciting team now led by Frank Lampard, means that the club is well placed to sustain its pursuit of success both on and off the pitch as well as maintain its financial stability over the coming years."
Chelsea manager Lampard has been preparing to recruit new players in the January transfer window after the club's transfer ban was halved on appeal to the Court of Arbitration for Sport.
The Londoners have been linked with moves for Lyon striker Moussa Dembele, Borussia Dortmund winger Jadon Sancho and Crystal Palace forward Wilfried Zaha, among others.
Lampard was unable to sign new players last summer due to the ban - although the Londoners were able to complete the signing of Mateo Kovacic as he had already been at the club on loan.
Christian Pulisic also joined up with Chelsea in the summer after the club signed the USA winger from Borussia Dortmund last January then loaned him back to the Bundesliga club for the rest of the season.
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