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Highlights
- Cettire's Q4 performance fell short of EBITDA expectations
- Revenue and cash levels declined sharply in April and May
- Concerns grow over potential equity raise to restore capital buffer
Luxury online fashion retailer Cettire (ASX:CTT) saw a sharp decline in its share price following a trading update that significantly underwhelmed market expectations. By 10:50 am AEST, the company’s shares had dropped 22.6% to 36.5 cents, bringing its 12-month decline to over 80%.
The company’s trading update revealed that in the first two months of the June quarter, it recorded an EBITDA loss of $6.9 million. This came as a surprise, especially against the backdrop of consensus estimates that had forecasted a positive $400,000 EBITDA for the full quarter, leading to a full-year expectation of $7.8 million in EBITDA.
Sales momentum has also taken a hit, with April and May revenue dropping by 21.6% compared to the same period last year. This indicates a considerable slowdown in consumer demand or operational challenges within the luxury e-commerce space. Given Cettire’s inclusion in the ASX300 index, such underperformance has attracted heightened scrutiny from market observers.
Cettire’s capital position has also weakened notably. The company’s net cash fell to $45 million by the end of May, down from $76 million in March. This $31 million reduction over just two months is attributed to operating losses and ongoing capital expenditures. Analysts have raised questions about the sustainability of its operations at this rate of cash burn, suggesting that additional capital inflows may be necessary.
While the company has not confirmed any capital raising plans, the swift erosion of its cash reserves has led to speculation around a potential equity issuance as a strategy to reinforce its balance sheet and fund near-term operations.
This recent development adds to a challenging period for Cettire, which had previously enjoyed significant investor interest during earlier growth phases. With mounting losses, declining revenue, and intensifying liquidity concerns, the road ahead appears to require careful financial recalibration.
Investors and stakeholders in the ASX300 will be watching closely to see how Cettire navigates the coming quarters, particularly in restoring operational profitability and stabilizing its cash position.
