City Chic Collective (CCX) H2 2024 earnings summary

Executive summary

• FY24 sales revenue declined 28.3% year-over-year to $131.6m, reflecting a challenging trading environment and business transformation, with 481k active customers and inventory reduced by 42.8% to $30.7m.

• Achieved strong positive momentum in the second half of FY24, outperforming pro forma underlying EBITDA forecast by 10%, with underlying EBITDA loss of $8.4m, a 47.3% improvement on FY23.

• Completed business transformation: brand and product refresh, focus on high-value customers, inventory normalization, divestment of Avenue and Evans, and significant cost reductions.

• Business restructure delivered $20.3m in cost savings, with 85% of initiatives implemented and support office headcount reduced by 50%.

• Set FY25 targets of $142m–$160m in revenue and $11m–$18m in EBITDA, with confidence in achieving these on lower unit volumes than previous years.

Financial highlights

• Gross margin improved to 57.3% in FY24, up 11.0 percentage points year-over-year, with H2 at 61.2%.

• Underlying EBITDA (post AASB16) loss of $8.4m, a 47.3% improvement year-over-year and 10% better than June's pro forma forecast.

• Net cash position of $3.9m at year-end, with additional $15m from Avenue sale and $3.1m from equity raise received post year-end.

• Inventory reduced by 42.8% to $30.7m as of 30 June 2024.

• Statutory NPAT loss attributable to shareholders was $93.0m, including discontinued operations.

Outlook and guidance

• FY25 targets: Revenue of $142m–$160m and EBITDA (post AASB16) of $11m–$18m.

• Positive momentum in first 8 weeks of FY25: Trading Gross Margin dollars up 28%, ASP up 58% year-over-year.

• Expectation for higher ASP and Gross Margin trends from H2 FY24 to continue into FY25.

• Store portfolio expected to remain stable in FY25, with no major expansion or contraction planned.

• Mid- to long-term goal to grow store portfolio to around 120 locations in 3–5 years.