Australian luxury retail platform Cettire has reported a 63 per cent fall in its net profit to $4.7 million for the first half of FY25, with the company reporting continued uncertainty in the luxury goods market.
This comes as its sales revenue grew by 11 per cent to $394 million.
This growth was reportedly driven by increased order volume, combined with the increase in average order value and a stable refund rate.
Average order value increased 4 per cent year over year to $821.
Cettire's statutory gross profit decreased in the half-year by 14 per cent to $70.8 million, “with the business experiencing revenue growth albeit at a lower gross margin percentage due to ongoing sector-wide discounting activity,” Cettire reported.
Advertising and marketing expense decreased to $30.9 million as the business moderated growth investment due to softer industry conditions.
The drop in net profit for the half-year was reportedly driven primarily by the decline in gross profit.
Cettire also reported a growth in its active customers by 21 per cent to just over 695,000.
“I am proud of what we have achieved in H1-FY25 considering the softer demand environment for luxury globally and the fact that we are cycling an extremely strong FY24 comparator period,” Cettire founder Dean Mintz said.
“Consistent with our strategy to deliver profitable growth with a bias towards profit, we achieved a meaningful uplift in adjusted EBITDA over two quarters, demonstrating our inherent ability to leverage our flexible business model to respond to challenging external environments.”
The platform’s EBITDA was $12.1 million, down from $26.1 million in the first half of FY24.
“Our ability to consistently deliver strong cash flows while maintaining our self-funding, low cost and capital light business model is once again validated by today’s results,” Mintz continued. “This places us in an enviable position to capture market share, as demand in the luxury sector begins to normalise.
“Taking into account the external challenges over the past six months, these results give me great confidence in our ability to drive significant profitable growth in the future as demand improves and we continue to invest in scaling the business.”
In the short term ahead, Cettire reported continued uncertainty within the global luxury personal goods market.
“While we are seeing pleasing developments in some areas within our business, the impact of softening demand continues to work through the industry, offsetting some of these positives,” the company reported.
“For example, while the strength observed throughout the company’s seasonal peak trading period in November and December was very encouraging, it has preceded a period of slower sales growth in early H2-FY25. This is somewhat consistent with industry trends we have observed in recent years.
“Over the past several weeks however, we have seen notable improvements in trading momentum.”