Cettire (ASX:CTT) outlined a profitability-focused first-half update as management navigated softer demand conditions and significant U.S. trade policy changes, while highlighting improving unit economics, rising repeat customer contribution, and continued balance sheet strength with no financial debt.
Customer metrics and unit economics
The company finished the six-month period with 613,000 active customers. Management said new customer additions slowed, citing softer demand and a deliberate decision to lower marketing spend. Executives emphasized a shift toward “quality engagement and conversion over volume.”
Repeat customers accounted for 69% of gross revenues, up from 67% previously, which management described as evidence of increasing loyalty and an important support for the business through demand cycles.
Unit economics improved versus the preceding six months. Customer acquisition costs declined to AUD 83, reflecting reduced paid marketing investment. Delivered margin per active customer rose to AUD 179, a sequential improvement from AUD 148 in the prior half, which management linked to reduced promotional activity designed to prioritize profit.
Regional trends and localization initiatives
Management said its localization strategy continued to diversify the revenue base during the period. Emerging markets gross revenue increased 21% year-on-year and represented around 45% of gross revenue.
By contrast, established markets—including the U.S., U.K., and Australia—contracted 13%, driven primarily by challenges in the U.S. The company said the U.S. represented approximately 41% of gross revenues, with Australia at 6% and the U.K. at 8%.
Executives highlighted several localization steps during the half:
- Launch of an Arabic language capability to build on momentum in the Middle East.
- Launch of Cettire’s flagship store on JD.com in China, with management indicating it would continue exploring additional routes to market in the region.
In Q&A, management said it was still “relatively early” in several of these markets, describing them as large luxury markets, and emphasized ongoing work to build localized capabilities.
Financial performance: revenue pressure, EBITDA improvement
For the half, sales revenue was AUD 382.8 million, down 3% year-on-year. Management attributed the decline to U.S. tariff changes and softer demand in that region. Excluding the U.S., sales revenue grew 13% to AUD 225 million.
Gross revenue was AUD 505.7 million, and management said refund rates remained relatively stable.
Delivered Margin was 14% of sales, impacted by higher U.S. duties costs absorbed into the fulfillment cost base. Management said this was partially offset by reduced promotional activity, and noted that Delivered Margin percentage improved compared with the second half of fiscal 2025.
Paid acquisition expenses were 4.2% of sales revenue, and brand investment was AUD 1.9 million, which management characterized as a modest level consistent with its profitability priority.
Adjusted EBITDA was AUD 8.7 million, for an EBITDA margin of 2.3%. Management highlighted a half-on-half adjusted EBITDA turnaround of AUD 20.5 million. In response to a question on the main levers behind the improvement, executives pointed to pricing changes to absorb duties, reduced promotional activity to improve “revenue quality,” fulfillment efficiencies, and a “strategic and conservative” marketing approach. Management added it was targeting further improvements in the coming half.
Balance sheet, VAT receivables, and going concern question
Management said its capital-light model continued to support resilience, with closing cash of about AUD 61 million (AUD 61.4 million was also cited) and no financial debt. The increase in cash since June was attributed to operating profits and favorable working capital dynamics.
The company noted a year-on-year increase in contract liabilities, which management said reflected lengthier delivery times leading up to the balance date, deferring revenue recognition into the subsequent period.
Management also addressed receivables tied to VAT paid on purchases in Europe, describing them as statutory amounts that are due and payable but subject to government payment timelines. Executives said governments had been slow to pay and that, “out of caution,” the company reclassified an additional portion of the receivable to non-current. Management said it expected broader supply chain improvements to be implemented during the half that should “considerably improve” the cash flow profile related to European input VAT going forward.
Asked about an auditor reference to a material uncertainty related to going concern, management stated the accounts were unqualified and framed the issue as largely technical, tied to a current asset shortfall and the more conservative classification of VAT receivables from current to non-current. Executives also said supply chain engagement was the strongest it had ever been and described the supplier relationship environment as “business as usual.”
Outlook: challenging Q3 comparisons, stronger Q4 expected
Management said short-term challenges in luxury are expected to persist, though it cited “some signs of improvement” and emphasized long-term sector fundamentals. The company referenced Bain & Altagamma research estimating a 2% decline in the personal luxury goods market in calendar 2025 and forecasting 3% to 5% growth in calendar 2026.
For the current quarter, management said Cettire is cycling a period of aggressive promotional activity and pull-forward of U.S. demand from the prior year ahead of “Liberation Day” tariffs implemented in early April 2025. Promotional activity peaked in March 2025, while the company said it has “meaningfully reduced” promotions in the current year. Against this backdrop, management reported quarter-to-date gross revenues down 13% versus the prior corresponding period.
While describing the U.S. policy and macro environment as dynamic, the company said it expects a significantly improved growth profile in the fourth quarter of fiscal 2026. Management also indicated it does not expect any meaningful change to current marketing spend run rates, emphasizing a balance between return on investment and growth.
About Cettire (ASX:CTT)
Cettire Limited engages in the online luxury goods retailing business in Australia, the United States, and internationally. The company offers clothing, shoes, bags, and accessories. Cettire Limited was incorporated in 2020 and is based in Melbourne, Australia.
