In a retail landscape where companies like Kogan.com
(ASX:KGN) and the online divisions of traditional retailers such as Myer
(ASX:MYR) and Kmart are grappling with declining sales due to the resurgence of in-store shopping, Cettire
(ASX:CTT), an online luxury goods group, stands out by not only weathering the storm but thriving and raking in substantial profits, as evidenced by its latest sales and earnings data.
In stark contrast to the slew of discouraging updates highlighting stagnant or diminishing sales growth from major players like Myer, Best and Less, JB Hi-Fi, and Harvey Norman, Cettire's performance, showcased in its 2022-23 results, shines brightly.
What's noteworthy is that Cettire's impressive performance isn't limited to Australia alone. The purveyors of the luxury goods it markets in the region have also been reporting robust sales and increasing earnings. Notable names include LVMH and its extensive array of luxury products.
Cettire announced on Thursday that its gross revenue for the year ending in June soared by 87%, reaching $539.2 million, with sales revenue achieving an even more remarkable increase of 98%, amounting to $416.2 million.
The company experienced a remarkable 156% surge in its 'delivered margin,' translating to $95.6 million, which accounts for 23% of its sales revenue—a significant climb from the previous year's 17.8%.
Moreover, the company disclosed adjusted EBITDA of $29.3 million and a net profit of nearly $16 million for the latest fiscal year. Both figures mark substantial improvements from the losses incurred in the year ending June 2022.
In a particularly positive note, the company ended the financial year with a cash reserve of $46.3 million and zero outstanding debt.
With such remarkable achievements, it's no surprise that the company's shares experienced an almost 18% uptick, reaching $3.30 by 11 am.
Cettire attributes its success to a 63% rise in active customers, now totaling 423,000. This, coupled with consistent repeat customer purchasing patterns, higher average order values, and a robust demand for luxury goods, underscores the company's strong performance.
In terms of repeat customers, Cettire now garners 58% of its gross revenue from this segment, a significant increase from the 50% recorded a year ago. Additionally, the company reported a decline in its paid customer acquisition expenses, which fell to 8% of sales revenue in FY 2023, down from the previous year's 14.9%, propelled by its impressive sales growth.
Founder and CEO Dean Minz expressed his satisfaction with the company's performance, stating, "FY23 has been another year of tremendous growth and transformation for Cettire. Through strong execution against our strategy to maximise profitable revenue growth, Cettire experienced rapid expansion while delivering substantial profitability and cash generation."
Minz continued, "Cettire's agility as a business, coupled with its adaptable cost structure, positions us to swiftly respond to market dynamics and optimise performance. The speed at which we've achieved enhanced performance in FY23 is a source of great pride for me."
Cettire is confident that its success isn't a mere one-year anomaly, reporting a robust start to the fiscal year 2023-24 in July.
The company stated that it achieved positive adjusted EBITDA, with sales revenue witnessing an approximate 120% surge over the corresponding period in the prior year.
Minz expressed optimism about the future, saying, "We are pleased by the early trading in FY24, with all our key markets performing strongly. Cettire is well positioned for another strong year of growth and profitability. We are well advanced in our preparations for China market entry, which remains a very attractive market opportunity and offers significant incremental growth potential."
For the fiscal year in review, the company did not declare any dividends.
