Australian plus-size brand City Chic has reported a 220 basis point lift in its gross margin percentage to 62.2 per cent despite a slight slip in total sales driven by a 31.4 per cent fall in US market revenue.
In a trading update today for the first half of FY26, City Chic confirmed sales hit $69.2 million, with Australian sales up 7.4 per cent to $59.4 million.
The retailer’s US sales fell to $9.7 million, driven mostly through partner sales. City Chic sells its products through select retailers in the US including Nordstrom, Macy’s and Amazon.
City Chic CEO and managing director Phil Ryan confirmed much of the margin expansion was driven by the Australian and New Zealand market, with trading margin here up 10.1 per cent.
“We achieved this by remaining disciplined in the Black Friday/Cyber Monday and Christmas trading period and avoided chasing top line sales through excessive promotions, while keeping inventory and costs under control,” Ryan said.
“Our customer numbers have remained resilient, and our high-value customer strategy is delivering results. We are focused on deepening that relationship by listening closely, delivering what she wants, and building the loyalty that drives sustainable growth in annual spend.”
Speaking on the US market, Ryan said the country remained profitable despite the sales slip. This also came amid a deliberate reduction in inventory in the overseas market in response to tariff-related volatility.
“The resilience of the US consumer has been a welcome surprise, and we’re encouraged by the underlying strength of our direct-to-consumer channels. As a result, Summer 2026 inventory has been ordered to support a return to higher sales levels in 2H FY26,” the CEO said.
Across the channels, online is City Chic’s largest by revenue, hitting $36.3 million. City Chic also manages a network for 76 stores across Australia, with retail sales hitting $27.1 million.
Partner sales were down by 29.9 per cent to $5.7 million.
Ryan also confirmed that during the half, the company fully repaid its debt, meeting all clean-down covenants for FY26 and finishing December with no drawn debt and total cash of $5.4 million.
“We also extended our $10 million debt facility through to the end of Q1 2028, while maintaining our existing covenant arrangements. This is a pleasing outcome and reflects the ongoing support of our bank.”
According to Ryan, the results overall were quite pleasing. As well as gross margin lifting, the brand’s ASP rose by 6.1 per cent
“By listening closely and moving quickly, we’ve seen an encouraging and positive response to our new collections.
“While there is more to unlock through further improvement, the trajectory is positive.”