Luxury online retailer Cettire has recorded an 88 per cent jump in sales for the third quarter to $191 million.
The double-digit boom comes as Cettire confirms its mainland China entry date to be before the end of FY24. It also comes despite recent scrutiny around its processing of duty payments and tax registrations in the United States.
Despite the lashing from media and consumers, Cettire’s active customer pool has grown by 84 per cent in the third quarter to around 644,000, with continued gross revenue contribution from repeat customers.
The company’s adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) hit $6 million, on a delivered margin greater than 20 per cent.
“This result reflects continued strength in Cettire’s quarterly performance, with ongoing momentum in sales revenue, active customer growth and conversion to profit,” founder and CEO Dean Mintz said. “Cettire continues to rapidly drive market penetration across its global footprint.
“Market conditions remain constructive and we have supplemented our strong customer proposition with marketing investment. Further, our increased focus on traffic quality has driven significant year-on-year improvement in conversion rate and an uplift in average order values.”
Mintz added that its US market has continued to show momentum, with year-on-year gross revenue growth accelerating in the third quarter compared with the year-on-year growth rate achieved in the first half of FY24.
“Since the implementation of the company’s updated checkout on March 19, 2024, we have observed stable conversion rates in the US.”
As earlier reported, Cettire’s checkout flow in both the US and Australia was updated so that customers see ‘all-inclusive’ pricing at the checkout, with estimated duties no longer being itemised during checkout.
For returns, Cettire’s proposition has simplified its US returns policy to remove any withholding for estimated duties.
There is no change in the returns policy in Australia.
“During the quarter we have also made significant progress in relation to our strategy to enter the mainland China market,” Mintz continued. “We confirm that Cettire will launch in the China market during Q4 FY24.
“This represents an important strategic milestone for the Company as we seek to further establish Cettire as a leading global luxury platform.”
The luxury retailer then commented on recent media scrutiny regarding its sales tax registration status in California and Texas.
The company confirmed it is registered for sales taxes in these states and “is in good standing” with them, and also confirmed it has been collecting and remitting sales taxes as normal in these states.
Cettire then confirmed it is registered for sales taxes in the vast majority of US states that have a sales tax regime. It added that these states, together with states that do not have a sales tax regime, accounted for approximately 99 per cent of the company's US sales revenue in the third quarter of FY24.
According to Cettire, it will continue to take steps to register in additional states as and when the obligation arises.
In the 9 months to March 31, 2024, Cettire collected approximately $18.7 million in US sales taxes. Total remittances of US sales taxes during the period were $17.1 million, with the $1.6 million difference resulting in an increase in the payables balance at period end to $3.1 million.
Overall, Cettire’s year-to-date adjusted EBITDA for the first nine months of FY24 was $32.1 million on year-to-date FY24 sales revenue of $545.2 million.
The company’s net cash balance at period end was approximately $90 million.