Plus-size fashion retailer City Chic has reported an 11.4 per cent rise in like-for-like store sales in its Australia and New Zealand market in the first seven weeks of FY27.
In its trading update this morning, the retailer said this growth came despite strong economic headwinds and a volatile trading environment.
The rise in comp store sales was offset by an 8 per cent drop in online sales for the first seven weeks, amid a deliberate reduction in promotional activity.
This sales growth in Australia and New Zealand was also offset by ongoing declines in City Chic’s United States market, but management claims there are early signs of improved US retail momentum following recent changes to income tax rates regarding tips and overtime in the country.
City Chic is projecting a return to growth in revenue and margin in the USA in the first half of FY27 – excluding wholesale, which has been a hard-hit channel for the brand in the market. The plus-size retailer also sells online in the North American market.
The plus-size retailer’s early FY27 momentum follows a shaky FY26, with total global sales slipping 3.1 per cent to $130.5 million in the past financial year.
ANZ revenue growth was up 7.6 per cent in FY26, with comp sales then up 5.6 per cent. In the USA, City Chic sales fell by 42.2 per cent to $16.7 million, or by 28.1 per cent when excluding the wholesale. According to City Chic, the US decline reflects the group's deliberate reduction in purchasing activity in response to tariff-related uncertainty.
“This reduction had the greatest impact on partner sales, which are more dependent on new product launches. During the year, City Chic also transitioned its Amazon business from wholesale to a marketplace model, which is expected to improve profitability over time.
“With fresh inventory now back in market, the group is seeing an encouraging customer response as it enters FY27.”
City Chic also reported an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $12.3 million, which is nearly double from FY25. This underlying EBITDA excludes non-recurring costs of around $200,000, related to restructuring.
At the bottom line, City Chic reported a statutory net loss of $6.6 million, which is an improvement on FY25 by 25.5 per cent.
City Chic CEO and managing director Phil Ryan said FY26 marked another significant step forward in its transformation.
“We have continued to expand margins, reduce costs and strengthen the quality of our earnings, demonstrating the benefits of the strategic actions we have taken over the past two years,” he said. "In ANZ, our strategy has resonated with customers. Revenue increased 7.6 per cent, supported by growth in customer numbers, higher average selling prices and continued improvements in product and execution.
“We now have a record 517,000 active customers and customer advocacy remains strong, with NPS improving to 76.”
In the USA, Ryan said while the decision to reduce purchasing impacted revenue, it materially reduced risk and protected profitability. “We now have fresh inventory back in market and her response to our dress collection has been encouraging,” he said.
“We are confident our USA business, in line with our revised strategy, is well positioned for growth in FY27.”
City Chic ended FY26 with a net cash position of $5.2 million, down slightly from $7.9 million at FY25 end, with a $10 million debt facility undrawn and extended to March 2028.
"We have built a simpler, more profitable and more resilient business,” Ryan said. “While there is still more work to do, we believe we have established a strong foundation for sustainable long-term growth."