Cettire shares crash despite quarterly revenue nearly tripling

An early-morning spike that saw shares in online designer fashion retailer Cettire (ASX: CTT) soar past the 80-cent mark was short lived, with the company tumbling mid-morning despite a promising quarterly trading update being released.

Cettire, which listed on the ASX in late-2020, today announced its results for the quarter ended 31 March, demonstrating 178 per cent growth in gross revenue to $70.2 million, of which $48.7 million came from online sales of clothes, accessories, bags, shoes and other items.

These solid results were backed up by a 269 per cent increase in unique website visits, totalling 13.3 million in the three month period, and 185 per cent growth in active customers, now at 246,880.

Many shareholders jumped ship this morning despite the announcement, perhaps capitalising upon the early boost in the company’s share price. At the time of writing, shares are trading down 6.8 per cent to $0.69 per share.

Nevertheless, the collapse is not unfamiliar to Cettire which experienced a similar phenomenon when posting its 1H22 results, with shares closing down by around 21 per cent on that day, 3 February.

Cettire’s founder and CEO Dean Mintz said the quarterly results released today reflected efforts made to improve the company's marketing initiatives and shopfront software, as well as the launch of a new mobile app.

“Our business continued to grow very strongly through Q3, driven by increased site traffic, substantially higher active customer numbers and repeat purchasers, which represented more than 50 per cent of gross revenues in the quarter,” Mintz said.

“We have driven improved marketing efficiency and conversion as we exited the quarter, leveraging our proprietary storefront software and new mobile applications.”

Cettire said the new mobile app for both Apple and Android phones will improve customer experience and support retention and conversion, considering 80 per cent of the group’s website traffic was already from mobile prior to the launch of any dedicated application.

“The launch of our mobile app represents a key milestone in the execution of our growth strategy and further extends our proprietary technology platform, whilst enhancing brand and customer experience,” Mintz said.

“Mobile applications are a critical component of our growth strategy to acquire new customers, increase conversion rates and improve retention. While the majority of our traffic is already mobile and our website is mobile-optimised, our apps enable a more seamless engagement with customers and provide considerable scope for an even greater personalised experience.

“In the early stages post-release, we are experiencing higher conversion rates and higher AOV for on-app purchases versus other channels.”

The group has been on a rollercoaster ride since listing at $0.50 per share in December 2020. The COVID-induced e-commerce boom helped propel CTT shares to a high of $4.80 in November 2021, but they have lost 86 per cent of their value since then.