- City Chic Collective (CCX) reports strong revenue growth despite the widespread impacts of COVID-19 currently faced by the retail industry
- In its preliminary, unaudited results for the first half of this financial year, Australia and NZ sales were up 14 per cent and US sales saw a 62 per cent increase
- In the UK however, labour and logistics issues continue to impact the Evans business
- The company predicts second half earnings to be stronger for FY22 due to acquisitions, first half disruptions to ANZ stores and as the Northern Hemisphere business evolves
- Shares have been trading 9.6 per cent higher at $4.90 at 12:40 pm AEDT
City Chic Collective (CCX) reports strong revenue growth despite the widespread impacts of COVID-19 currently faced by the retail industry.
In its preliminary, unaudited results for the first half of this financial year, the multi-channel retailer predicts sales revenue for Australia and New Zealand of $80.8 million, marking a 14 per cent increase year-on-year.
A 62 per cent increase is expected for its US sales over the period with revenue hitting $77.2 million compared to $47.7 million for the first half of the 2021 financial year.
Post balance date, City Chic completed the acquisition of US plus-sized online marketplace CoEdition’s customer lists, brand and URL, which is scheduled to be integrated into its USA platform this month.
According to Managing Director Phil Ryan, the strong performance in the US demonstrates the company’s potential to capture and grow its international markets.
While City Chic’s strong inventory position supported sales growth in the US and Australia through the critical Black Friday and Christmas trading period, labour and logistics issues in the UK continue to impact the Evans business.
The company’s stores across Europe, the Middle East and Africa contributed $20.3 million of the total $178.3 million in revenue for H1 FY22, driven partly by the acquisition of Evans and Germany-based online marketplace Navabi.
In terms of active customers, including customers who have shopped online, in-store and omni-channel in the last 12 months, City Chic has noted a 23 per cent increase to 1.316 million.
Website traffic also increased by 22 per cent, which the company said makes up one of the drivers of group revenue and depends on conversion and average basket size, both of which have shown “pleasing results” through assortment increases and marketing improvements.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) is in the range of $22.5 million to $23.5 million, in line with the prior corresponding period, which the company said is pleasing since it included a $4 million EBITDA impact from store closures, the impact of acquisitions and COVID-19 related marketing and cost reduction measures.
The earnings split for 2022 is expected to be different from historical trends as a result of acquisitions, first half disruptions to ANZ stores and as the Northern Hemisphere business evolves, CCX expects second half earnings to be stronger than the first half.
Despite the continued volatility and widespread impacts relating to the pandemic and the new omicron variant, Mr Ryan said the “performance of the business to date demonstrates the team’s ability to navigate volatile market conditions.”
“I am pleased with our trading results for the first half, with strong revenue growth in all
regions despite well publicised labour shortages and impacts to global logistics and supply chains, and government directed lockdowns related to the pandemic,” Mr Ryan said.
“We are continuing to drive growth across all our regions while adapting our business to address the ongoing challenges.”
Audited interim results for this financial year are expected to be released on February 24.
Shares were trading 11.4 per cent higher at $4.98 at 12:40pm AEDT.