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Date : 28/09/2022

Cettire Ltd (ASX: CTT) has Shocked Traders by Reversing its Downward Trajectory.

Online luxury goods retailer Cettire Ltd (ASX: CTT) operates as cettire.com, which it uses to serve customers in Australia, the United States, the United Kingdom, Canada, and other countries. More than 400,000 apparel, shoes, purses, and accessories for men, women, and children from more than 2,500 premium brands are available at the company’s online store.

When it comes to optimising volume, profit, logistics, and automatically fulfilling client orders, Cettire’s proprietary technology platform enables seamless interaction with the company’s suppliers for largely automated and real-time product and inventory management.

The recent upswing in CTT stock has caught investors off guard, and the stock is being closely monitored.

CTT: FY22 Key Financial

CTT stock is trading at $0.80 at the time of this writing and has a market cap of approximately 304.99 Million AUD.

ASX CTT

  1. Sales for the year were reported at $ 209.9 million for Cettire, up 127% from $92.4 million in 2021.
  2. The firm’s post-tax loss soared to $19 million, an increase of 7,494%.
  3. The company has seen a 127% increase to 260,249 in its number of active consumers.
  4. Compared to 40% in FY2021, 50% of Cettire’s gross income now comes from recurring clients.
  5. Adjusted EBITDA came in at minus $21.5 million for the firm, down from a positive $2.35 million in FY2021.
  6. As of FY22, the Group had $22.7 m in cash and no debt ($47.9 m in cash and equivalents and no debt in 2021).

CTT: Pandemic-driven e-Commerce growth boosted CTT’s stock price.

Cettire’s stock price surged about 1,000% in the year after its IPO to $4.85 in November 2021. Lockdowns spurred demand for online shopping as many outlets were closed.

As the bear market began in early 2022 on worries of skyrocketing interest rates and likely stagflation fueled by supply chain disruption, most growth stocks, including Cettire’s, had swift and severe falls.

CTT’s bearish sentiment was bolstered as the firm revealed increasing losses as its sales revenue continued to climb through 2022. Investors had gotten frustrated with expanding unproductive revenues.

The cherry on the cake was when Cettire’s founder and CEO sold 9.18% of the company’s issued capital in a block sale for $1.35. This drove its share price tumbling to $0.35 in 3 months, significantly below the IPO price of $0.50.

CTT: Cettire has Positive Plans for the Future.

In the newest update from Cettire, the company plans to achieve EBITDA positive in FY23 and, more crucially, to self-fund its sales growth.

CTT’s short-term goal is to generate sales from its current sales through optimisation projects. It has also decided to put off expansion into the China market and the beauty category until sometime in FY23.

The company’s cash burn of $24.5m in FY22 and the remaining cash on hand is $22.7m as of 30 June 2022, a significant event because many shareholders had expected a capital raise if the current pace of cash burn persisted.

The report showed that the 2HY22 optimisation attempts seem to be working, as July and August 2022 sales were EBITDA positive. PCP sales climbed 67% in July and August, with a $2m EBITDA margin in July.

CTT: Cettire has growth potential.

CTT has primarily concentrated on boosting its sales in Australia, the US, and the UK. While there is undoubtedly an opportunity for expansion in these well-established areas, the company’s most significant sales potential lies in growing economies like China. In 2021, more than 20% of all luxury goods bought by consumers worldwide were bought in China.

CTT also examines other product categories, especially beauty, which might provide Cettire Ltd news and growth analysis, ASX CTT Shares with substantial market prospects in the future.

Investors must also consider the macroeconomic situation and its influence on consumer purchasing power. Consumers of high-end items tend to weather economic downturns better than the general public. Still, even the well-heeled will cut back on their discretionary spending in a prolonged downturn. Cettire Ltd (ASX: CTT) has Shocked Traders by Reversing its Downward Trajectory.

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