Cettire shares jump 13% despite 'unusual' executive pay hikes
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More news: Cettire shares jumped on Friday as analysts raised concerns over hikes to executive pay and the departure of a director after less than six months on the board.
What they said: In a note to clients, RBC analyst Wei-weng Chen said Cettire's topline results were largely in line with expectations but raised concerns that the company's working capital balance is "continuing to unwind" after cash on the books fell by $8 million.
"Adding to our balance sheet concerns is a reclassification of $22 million of VAT receivables to non-current with CTT noting that while the receivables are recoverable, timing is uncertain," Chen said.
"The departure of Daniel Agostinelli from the Board after a four-month tenure strikes us as unusual. As does the decision to give material cash pay rises to the CEO and CFO in a time of stress."
On Friday Cettire said it was raising total fixed remuneration for chief executive Dean Mintz from $462,591 to $850,000, and nearly doubling his maximum short term incentive to $850,000.
Chief financial officer Tim Hume was having his total fixed remuneration raised from $386,069 to $550,000 and his maximum short term incentive raised 12% to $412,500.
Responding to questions on the investor call, Hume said the company had not reviewed its remuneration structure in five years with the new pay figures reflective of the company's "growth in scale and complexity".
"I think the other point of note here is that we have a very small executive team. Both of the executives within Cettire perform a lot of roles and I think if you take a view on on compensation overall for the company, relative to others of this scale. I suspect we would benchmark," Hume said.
Cettire drops to full-year loss as revenue growth flatlines and director walks
The news: Online fashion retailer Cettire has tumbled to a statutory net loss after tax of $2.6 million, from a $10.5 million profit last year, as the company cited "significant headwinds" driving a slowdown in demand during the period.
Company director Daniel Agostinelli has also departed the board after only being appointed in April to focus on his role as CEO of Accent Group.
The numbers: However, analysts were expecting a worse loss of $3.7 million, according to Visible Alpha data.
Sales revenue was roughly flat year on year at $742.1 million, above consensus estimates of $740.1 million.
Gross revenue fell slightly to $975.3 million. Gross margins fell from 20.9% to 16.1%. Active customers declined 5% to 657,000.
The context: Cettire said the luxury market globally had been soft globally creating a more competitive sales environment that was impacting its bottom line.
What they said: "The Company continued to observe a high degree of promotional activity throughout the year, which limited the overall margin opportunity. To maintain market share growth, Cettire invested through this period, predominantly in the form of promotional discounts, which negatively impacted gross margin percentage," the company said.
Cettire also acknowledged it has been hit by changes to the US de minimis rules which had created an uncertain market environment for the business.
"Year-on-year growth rates in the U.S. have materially improved in July and August month-to-date," the company said on Friday.
"However, the changes to the U.S. de minimis rules, effective 29 August 2025, could result in significant market disruption, and it is uncertain whether the improving trends Cettire has experienced in the U.S. during July and August will continue."
