Plus-size fashion retailer City Chic has reported a modest wrap-up of FY26, with sales improving alongside a strong uptick in earnings, despite challenges in the United States and across wholesale.
For the 52 weeks to June 28 this year, City Chic’s unaudited trading update showed a 7.6 per cent lift in AU/NZ revenue, which offset a 28.1 per cent decline in the United States. Overall sales were down 3.1 per cent, hitting $130.5 million, dragged mostly by wholesale and marketplace channels, which both fell 76.5 per cent and 17.5 per cent respectively.
City Chic cited a material impact from the closure of its wholesale business with Amazon for the revenue slip. Over time, the company plans to transition this business to a marketplace model, which it claims will offer greater control and flexibility in assortment and pricing.
City Chic’s total sales grew 1.8 per cent when excluding the wholesale impact.
The only channel at City Chic to see a lift in sales was retail stores, rising 9.5 per cent to $61.9 million, while online channel sales were down by 2.7 per cent to $59.6 million.
In AU/NZ, City Chic reported that total sales here grew amid a lift in store sales (up 9.5 per cent) and online (up 5.4 per cent). AU/NZ sales accounted for the bulk of global revenue, hitting $113.8 million compared to $16.7 million in the USA.
Sales metrics aside, the company is expecting to deliver an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $11.5 million and $12.5 million. This reflects continued margin expansion and disciplined cost management, according to City Chic, despite ongoing market volatility and persistent macroeconomic headwinds.
As for challenges in USA sales, City Chic cited a deliberate decision to temporarily reduce stock purchases in response to tariff-related volatility. With purchasing activity now returned to normal levels, the USA is reportedly seeing encouraging customer response to City Chic’s Summer product range and improving sales momentum as it enters FY27.
“The disciplined execution of our strategy has delivered a materially stronger earnings result this year, reflecting ongoing margin improvement and strong cost management across the business,” City Chic CEO and managing director Phil Ryan said.
“While we had anticipated second-half tailwinds from rate cuts [in Australia], instead we saw further rate increases and higher fuel prices, which resulted in record-low consumer confidence in Australia.
“Against this challenging backdrop, the team has remained focused on executing our strategy and meeting our customer where she is. This has become our motto as we continue to navigate this environment with her.”
Ryan added that City Chic’s customer base has continued to grow, driven by the improvements made across its product ranges and the service delivered by store teams. He noted that customer feedback and satisfaction scores shared month after month remain “very encouraging”.
“We continue to build a more resilient and profitable business, characterised by a stronger margin profile, a lower cost base and disciplined inventory management,” Ryan said. “Maintaining our strategic focus on product and customer experience, we are confident in our ability to continue to grow sales and deliver sustainable profitability over time.”
City Chic’s other key metrics improved, including a 2.1 percentage point lift in trading margin to 60.6 per cent, driven by product mix updates and reduced promotional activity.
Cost of doing business decreased by approximately 7.5 per cent year-on-year, driven primarily by operational marketing and “labour efficiencies”.
Ongoing cost-out initiatives have largely offset persistent inflationary pressures,” City Chic added.
Inventory closed the year at $24.1 million, in line with expectations and down 11.4 per cent from $27.2 million at FY25 end.
City Chic ended the period in a net cash position, with $5.2 million in cash and no drawn debt against its $10.0 million facility, which remains in place until March, 31 2028. The first clean-down requirement for FY27 has already been completed.
City Chic will announce its audited FY26 results on Monday, August 24.