City Chic’s global year-to-date revenue is down approximately 7% to $157.1 million compared to the prior corresponding period as it reports “volatile” conditions since its AGM last month, with its overall demand below expectations.
However, its YTD global revenue is approximately 38% up on FY21.
The Group said its 1HFY23 results will be significantly influenced by the Black Friday/Cyber Monday and Christmas trading period ending January 1, 2023.
In line with the market, City Chic said it has increased its promotional activity to drive demand, resulting in further gross margin compression since the AGM.
It said the combined effect of reduced revenue and gross margins, and higher fulfilment costs in line with the update at the AGM, is expected to result in a small underlying EBITDA loss (pre-AASB16) for 1HFY23. This is subject to trading in the final two weeks, ordinary accounting period-end review and audit.
Despite the demand pressures, City Chic said it is confident inventory will be at the lower end of the range provided at the AGM of $168-$174 million at the end of 1HFY23, subject to demand and foreign exchange movements.
The Group’s Australian and New Zealand market recorded a YTD revenue of $73.2 million, which is flat on last year. Its store revenue is up 35% YTD despite store closures in PCP, and up 10% on FY21. YTD online revenue is down 18% off a strong PCP and up 16% on FY21.
Summary revenue by region and channel YTD means the 24 trading weeks from 4 July 2022 to 18 December 2022 (in each region).
In its American market, YTD revenue was down 14% to $64.9 million with reported increased pressure on consumer demand and cycling a strong result in PCP. It is up 32% on FY21.
In Europe, Middle East and Asia, YTD revenue is down 5% to $19 million due to market conditions and higher levels of returns.