Subject to audit, the company’s retailer's underlying EBITDA is expected to range between $6 million and $6.5 million, marking a significant rebound from the fiscal 2024 (FY24) EBITDA loss of $8.4 million, City Chic said in a press release.
The comparable store sales grew by 8.4 per cent, with second-half growth accelerating to 10.3 per cent. The trading margin improved by 3.6 percentage points (pp).
Region-wise, revenue in Australia & New Zealand (ANZ) grew 8.3 per cent YoY to $105.8 million, with second-half growth accelerating to 15.2 per cent. Comparable store sales in the region increased 8.4 per cent.
ANZ sales grew by 15.2 per cent in the second half (H2), driven by strong trading momentum, with comparable store sales up 10.3 per cent and online up 17.8 per cent on prior corresponding period (PCP), at better trading margins.
The US revenue declined 14.9 per cent to $28.9 million, impacted by continued volatility in the region due to shifting trade policies. However, City Chic-branded product sales in the US grew 25.6 per cent.
Channel-wise, the revenue from stores rose 3.8 per cent to $49.8 million, with a strong 11.2 per cent growth in H2. Meanwhile, Online sales surged 11.5 per cent to $67.9 million. H2 growth for online sales stood at 21.8 per cent, making it the strongest-performing channel.
However, the partner revenue fell 25.1 per cent to $17 million, reflecting a PCP which included Avenue inventory sales. The second half recorded a 22.7 per cent decline in this segment.
The inventory levels dropped 12 per cent to $27.2 million, reflecting tighter purchasing strategies. The group maintained a cash balance of $8 million, with $5 million still undrawn from its $10 million debt facility.
“I am pleased with the EBITDA turnaround—returning to profitability is a significant milestone for the business. We are making strong inroads in our margin improvements and cost base reductions and are now focused on driving revenue growth, that will deliver sustainable profitability,” said Phil Ryan, chief executive officer (CEO) and managing director of City Chic. “The growth has been lower than planned, with the expected uplift from the recent interest rate cuts and improving consumer sentiment yet to materialise to the extent anticipated.”
“The USA has remained volatile, with the ongoing changes in USA foreign trade policy directly impacting demand. Both factors have resulted in our revenue and EBITDA being slightly below our guidance,” added Ryan. “Making these inroads has not been easy, and I believe we are only halfway there on this journey. But with our simplified structure and significantly lower cost base, we are well positioned to take advantage of more favourable market conditions when these return.”
ALCHEMPro News Desk (SG)
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