Cettire’s Quarterly Performance Sparks Downgrades Amid Slowed Sales Growth

October 30, 2024 02:00 PM AEDT | By Team Kalkine Media

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Cettire’s Quarterly Performance Sparks Downgrades Amid Slowed Sales Growth — Image source: shutterstock

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Highlights

Cettire faces downgrades following a quarterly update indicating slower sales growth.

Forecasts for Cettire’s revenue revised due to a 5% growth in a key quarter.

Stock value saw a significant drop, closing at $1.55.

Luxury fashion retailer Cettire (ASX:CTT) experienced a shift in market sentiment after recent quarterly results revealed a slowdown in its sales growth, prompting some financial institutions to adjust their outlook on the company. Bell Potter, one of the firms evaluating the brand's performance, revised its rating following this update. Notably, Cettire's second quarter—historically significant for the brand’s seasonal revenue—saw sales growth at a modest 5%, attributed to what was described as "profit optimization."

This slower growth pace led Bell Potter to adjust revenue forecasts for Cettire, expecting a similar trend to continue not only throughout the current quarter but possibly into the upcoming one as well. Such forecasts indicate that the company may experience some challenges in reaching prior projections within the timeframe, focusing instead on maintaining its profit margins amidst the current retail environment.

Bell Potter’s revised outlook comes after closely examining Cettire's latest numbers and assessing how this measured approach to profitability may influence overall revenue figures. With these insights, the firm chose to leave Cettire’s price target unchanged at $2. Despite this steady projection, Cettire’s stock saw a significant impact in market trading, with a 12.4% drop, bringing its share value to $1.55. This decrease reflects broader market reactions to the company’s update and the revised expectations moving forward.

Similarly, RBC Capital Markets also issued a new rating for Cettire on Wednesday. RBC downgraded its outlook to “underperform” and set a revised price target at 90¢. This adjustment aligns with RBC’s expectations around the brand’s performance trajectory over the coming quarters. The financial institution's review suggests that challenges in sustaining high growth rates may prompt further adjustments to Cettire's approach in the competitive luxury market sector.

As these financial assessments unfold, Cettire’s quarterly performance continues to garner attention. With retail dynamics continually evolving, Cettire’s strategy and adaptability in maintaining profitability while pursuing growth will be critical areas for market watchers to observe in the coming months.

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