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Online luxury fashion retailer Cettire (ASX: CTT) has seen its share price crushed this morning despite the company releasing the results of its first half, during which revenue and sales trumped figures recorded in the entire 2021 financial year.
The company recorded $145.1 million in gross revenue for 1H22, nearly triple that recorded in the prior corresponding period.
However, shareholders are likely more concerned with the $8.3 million net loss recorded in the period, down from a $2.3 million profit as of 31 December 2020.
The company attributes this loss to investments in future growth, but investors are not pleased, with shares down around 20 per cent at the time of writing.
“The company continued to deliver exceptional growth, building off the foundations put in place over the past 12 months and invested in its brand, customer acquisition and further technology development, to cement its rapidly expanding market position,” Cettire said.
In addition to the bumper gross revenue figure, Cettire grew active customers by 208 per cent to 209,000, and saw orders more than triple to 215,000 during the six months.
Cettire founder, CEO and executive director Dean Mintz said the company’s pure play focus left it in a good position during a period when traditional bricks and mortar players had to deal with the Omicron lurch.
“At a time when many retailers, both online and bricks and mortar, have seen revenues decrease as COVID restrictions eased, Cettire continued to deliver exceptional revenue growth given the high level of customer engagement, the scalability of our capital light, high cash generating business model, and the benefits of our proprietary technology platform flowing through,” Mintz said.
“The financial results delivered over the first half of FY22 demonstrate the substantial progress we’ve made in executing our growth strategy. A number of important enhancements were implemented to our consumer proposition including further localisation, enabled by our proprietary e-commerce storefront solution, and investing in our brand.
“What excites us is that Cettire has only just started and is in the early stages of its growth journey. The runway ahead is vast and we will continue to invest to capture the significant market opportunity we see for the business.”
At 31 December 2021, Cettire had a cash balance of $55.5 million and zero debt, which the company says gives it balance sheet flexibility to further capitalise on global growth opportunities.
The retailer also says positive trading momentum has continued into H2 FY22, with unaudited gross revenue increasing 242 per cent on January 2021.
“Cettire has tremendous growth opportunities in the markets in which we have historically been strong and had a localised proposition, such as the US, UK and Australia. In addition, we have started to unlock the growth opportunity in multiple high value luxury goods markets, where we already have services, due to the migration of traffic to our proprietary storefront, which supports localised content, currencies and payment options,” Mintz said.
"Our growth trajectory has continued into H2 FY22, where we have experienced a further acceleration in our growth rate in January. Given the global growth opportunity available to Cettire, we will be running the business to maximise revenues by further investing in brand and customer acquisition, to drive long-term shareholder value.
“Our focus for the remainder of FY22 is to continue to enhance our customer proposition which is centred around our vast selection of luxury products, value and rapid fulfilment, whilst continuing to develop our deep and diverse supply relationships and investing in our world-class proprietary e-commerce technology that can be rapidly scaled to support entry to new product and geographic markets.”
Shares in CTT are down 19.21 per cent to $2.44 per share at 12.37pm AEDT.
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