City Chic Collective H1 FY24 Results Overview

City Chic Collective Limited (ASX: $CCX) has released its financial results for the 26 weeks ended 31 December 2023, reporting a sales revenue of $105.8m, down 29% on H1 FY23. The Group also achieved a significant improvement in revenue and margin in Q2, especially in ANZ stores. Additionally, the company has implemented $25m in annualised cost savings and mitigation measures, resulting in an underlying EBITDA loss of $7.5m for H1 FY24. City Chic expects to trade profitably in H2.

Executive Commentary on H1 FY24 Results

In the first quarter of FY24, we were focused on executing our strategy through rightsizing our cost base, optimizing our inventory position, and introducing new and relevant products to our markets to drive demand. Our cost reduction measures will deliver approximately $25m in annualized savings and mitigation, exceeding our initial targets. Meanwhile, the connection we have with our customer remains strong, with an NPS score of 71. The feedback and sell-through on our new ranges has been encouraging, and our new product is expected to support our return to profitable trading.

Summary of H1 FY24 Results and Outlook

City Chic Collective's H1 FY24 results reflect a 29% decrease in sales revenue, impacted by consumer confidence, with significant improvement in Q2 performance, especially in ANZ stores. The company has implemented $25m in annualized cost savings and mitigation measures, exceeding initial targets. Despite an underlying EBITDA loss of $7.5m, City Chic expects to trade profitably in H2 as strategic marketing programs commence to drive traffic and new season products deliver margin improvement. The company's net cash position at the end of H1 FY24 is $3.5m, and it has decided not to declare a dividend for H1 FY24 in light of continued market uncertainty and capital management priorities.