Luxury retail platform Cettire (ASX: CTT) is coming off a pretty successful first half FY24—a remarkable feat at a time when luxury spending has taken a backseat.
The Company saw a major uptick in gross revenue, reaching $460.5 million, a 90% increase compared to the previous corresponding period. Sales revenue also soared to $354.3 million, up 89% from the same period last year. The number of active customers rose by 83% to approximately 576,000, with accelerated growth observed since September 2023 (Black Friday, Cyber Monday, Christmas, Thanksgiving—basically, tis’ was the season to shop).
Adjusted EBITDA stood at $26.1 million with a 7.4% margin, while profit reached $16.4 million. The average order value saw a 4% increase to $791. This was made possible thanks to Cettire’s marketing activities and growth in emerging and existing markets.
Cettire’s Founder and CEO, Dean Mintz, said, “Cettire delivered an exceptional result for H1 FY24. During the period, we experienced broad-based momentum across both Established and Emerging Markets, supported by our localisation initiatives and marketing execution. Notably, we observed an acceleration in growth in revenue and active customers through the December quarter, while continuing to deliver significant profitability and cash generation.”
During this period, Cettire augmented its investment in paid customer acquisition to 8.9% of sales revenue, compared to 7.9% in the first half of FY23, which facilitated its revenue growth.
He added, “I believe this is our strongest trading half since Cettire went public several years ago and further demonstrates the uniqueness of our business model, the benefits of our proprietary technology platform and the strength of our execution. Our proposition is clearly resonating with both the demand and supply side of our platform as we continue to rapidly penetrate the global personal luxury goods market.”
In a testament to the demand-side resonating, repeat customers contributed to 58% of total gross revenues, up slightly from the previous period’s 56%, showcasing both a higher average spending per order and increased order frequency within this customer segment. This consistent trend in repeat customer behaviour, coupled with favourable market conditions, reaffirms Cettire’s global expansion initiatives.
It also prioritised localisation efforts using its proprietary storefront software to expand into emerging markets, focusing on scaling features like multi-language support and local payment options initiated in FY23. This strategy drove significant growth in emerging markets, with gross revenues soaring by 138% compared to the previous corresponding period, contributing 31% to total gross revenue. Established markets also showed robust performance, with a 74% increase in gross revenues.
Looking forward, Cettire is preparing for the launch of a direct consumer channel in China, including re-platforming efforts to ensure seamless operation within and outside the country’s firewall.
With a net cash balance of $100 million as of December 31, 2023, and zero debt, Cettire is (very) well-positioned to capitalise on growth opportunities and explore capital management initiatives.
What’s more, the positive trading momentum has already bled into the second half of FY24, with January’s performance showing an approximately 80% increase in gross revenue compared to the previous year, resulting in positive adjusted EBITDA. Cettire remains focused on maximising profitable revenue growth while self-funding its operations.
Alinda is a Business Reporter for The Sentiment
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