Cettire’s (ASX: CTT) shares witness sharp decline as company highlights softening demand environment

Highlights

• Cettire is an online global retailer of numerous personal luxury goods
• In 1HFY24, CTT’s adjusted NPAT jumped over 52% to AUD 16.41 million
• Mintz (Dean) has the highest stake in the company with a shareholding of around 29.98%

Established in 2017, Cettire Limited (ASX:CTT) is an international online retailer, which offers a variety of personal luxury goods through its official website. The company has over 2,500 luxury brands and around 500k products of accessories, bags, shoes, and clothing.

In the first half of the financial year 2024 (1HFY24), the company recorded an 89% growth in its sales revenue to AUD 354.30 million, while its adjusted EBITDA went up by 56.29% to AUD 26.10 million, backed by its localization initiatives deployed in FY23, including localized payment options and multi-language support. This initiative resulted in rapid growth in emerging markets, with gross revenue in these markets growing by 138% year over year in 1HFY24.

The period saw a 52.83% YoY rise in adjusted NPAT to AUD 16.41 million.

Top 10 shareholders of CTT

The top 10 shareholders of CTT have around 65.70% ownership in the company, while the top four have around 60.84% of the holding. Mintz (Dean) and Regal Partners Limited have the maximum stakes in the firm with holdings of ~29.98% and ~15.24%, respectively.

Recent business update

On 24 June 2024, the company informed about the launch of its direct platform in mainland China through www.cettire.cn and that it has commenced processing orders. Meanwhile, the company also highlighted that operating environment within global online luxury has become challenging as demand has softened. To boost sales, online retailers are increasing promotional activities, leading to margin contraction, CTT highlighted.

Through an ASX update dated 5 June 2024, the company notified that Cal Rock Capital Masters Fund LP increased its holding in the company to 14.11% on 3 June 2024, up from 12.70% as of 22 May 2024.

Outlook

In FY24, the company anticipates revenue in the range of AUD 735 – 745 million, reflecting 77% to 79% growth over FY23. The anticipated range of adjusted EBITDA for FY24 is AUD 32-35 million, a 24-36% growth over FY23.

The company informed that in 4QFY24, it continued to witness broad-based revenue growth due to increased penetration and market share in the online international personal luxury goods market. The company expects substantial growth in active customers annually and gross revenue contribution from repeat customers.

Share performance of CTT

CTT shares closed 1.76% lower at AUD 1.115 apiece on 25 June 2024. With this, in the past year, CTT’s share price has declined by almost 60%, while in the past three months, it has dropped by over 72%.

The 52-week high of CTT is AUD 4.90, recorded on 1 March 2024, and the 52-week low is AUD 1.080, recorded on 24 June 2024.

CTT Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 25 June 2024. The reference data in this report has been partly sourced from EODHD/Others.

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