City Chic Collective Limited H1 FY24 report

City Chic Collective Limited (ASX: $CCX) has reported a net loss after tax of $21.0m for the 26-week period ended 31 December 2023. The company achieved revenue from continuing operations of $105.8m, representing a reduction of 29% compared to the same period in the previous year. The Group's strategic decision to exit the EMEA region and the Evans and Navabi brands during the prior period has impacted the financial statements, with the profit and loss presented for the continuing operations in ANZ and USA, and EMEA presented as a discontinued operation.

Executive Commentary on H1 FY24 performance

The Group successfully cleared inventory during Q1 in both regions, impacting revenue and trading margins. However, this resulted in new and relevant products being available in ANZ through key sales periods. The Group's cost reduction program, including headcount reductions, has made good progress, and logistics costs decreased largely in line with the fall in revenue. The Underlying EBITDA from continuing operations post AASB16 was a loss of ($7.5m), and the Underlying EBIT was a loss of $18.4m. The Group's debt facility was amended to $20m from $31.5m, and will reduce by a further $5m at the end of June 2024.

Summary of H1 FY24 report and outlook

City Chic Collective Limited reported a challenging H1 FY24, with a net loss after tax of $21.0m and a reduction in revenue from continuing operations. The strategic decision to exit the EMEA region and the Evans and Navabi brands has impacted the financial statements, with the profit and loss presented for the continuing operations in ANZ and USA, and EMEA presented as a discontinued operation. The Group's cost reduction program has shown progress, and the debt facility was amended to improve the balance sheet position. Looking ahead, the Group aims to return trading margins to historic levels with the arrival of new ranges towards the end of 2H FY24, and forecasts a positive net operating cashflow going forward.