City Chic’s (ASX:CCX) shares plunge over 23% post mixed trading update

December 20, 2022 03:32 PM AEDT | By Tamnna
Follow us on Google News:

Highlights

  • City Chic shared trading and 1HFY23 outlook on the ASX today (20 December).
  • Following the news, shares of City Chic were trading in the red, down 23.305%.
  • The company’s global revenue for 1HFY23 was 7% lower to AU$157.1 million.

Today morning (20 December), Australian retail clothing company City Chic Collective Limited (ASX:CCX) witnessed a huge drop of 23.305% on the ASX. This decline appears to be triggered by the company publishing a mixed update on trading since its annual general meeting (AGM) on 25 November 2022.

The group hinted that the Black Friday, Cyber Monday, and Christmas trading season, concluding on 1 January 2023, would have a substantial impact on its 1HFY23 earnings.

Following the ASX announcement, one share of City Chic Collective was valued at AU$0.452 as of 1:36 PM AEDT, 20 December 2022.

A glance at City Chic’s trading update and 1HFY23 outlook

According to City Chic, market circumstances have remained unstable since the AGM, and overall demand has fallen short of projections. Global revenue for the company dropped by around 7% to AU$157.1 million from the prior corresponding period (pcp). However, revenue in 1HFY23 was 38% more than it was in FY21.

Since the AGM, City Chic has intensified its promotional activity to boost demand in line with the market, significantly compressing its gross margin. As stated in the ASX filing, the combined effect of decreased revenue and gross margins and higher fulfilment costs in accordance with the AGM update is anticipated to result in a slight underlying EBITDA loss for 1HFY23.

Despite the strain on demand, City Chic is confident that inventory will be at the lower end of the range of AU$168 million to AU$174 million (as quoted during AGM) at the 1HFY23 end, subject to demand and foreign exchange movements.

City Chic’s revenue by region and channel

ANZ: For the ANZ region, City Chic’s year-to-date (YTD) revenue remained flat at AU$73.2 million, while stores revenue climbed by 35% on pcp and 10% on FY21. The online YTD income was up 16% from FY21 but down 18% from a strong pcp.

Americas: Due to rising pressure on consumer demand and cycling a very good pcp result, the company's YTD revenue in the Americas fell 14% to AU$64.9 million. It was 32% greater than in FY21, though.

EMEA: Due to market conditions and greater levels of returns, City Chic's YTD revenue in EMEA was 5% lower at AU$19 million.

Partners: The partner businesses kept up their remarkable growth during 1HFY23, albeit at a lower rate; YTD revenue across all areas was AU$17.1 million, up 111% from the prior year.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.



Top ASX Listed Companies

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK