Cettire profit falls 34% on shrinking margins
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The news: Luxury ecommerce platform Cettire has suffered a sharp profit contraction after resorting to discounting in a soft luxury market.
The numbers: Cettire made a net profit after tax of $10.4 million, down 34% on the previous year.
The company conceded the luxury retail market had softened substantially in the last quarter of the financial year, forcing Cettire to increase its promotional discounts and advertising spend.
Marketing spend more than doubled from the year prior to $75.7 million. Customer acquisition costs jumped to $130 from $96.
As a result, gross margins fell from 23% to 20.9%, in line with guidance provided in its last update.
Revenue hit $742 million, slightly above recent guidance. Active customers grew to 692,000 and the company processed almost 1.2 million orders.
The context: Cettire has become one of the ASX's biggest battleground stocks and one of its most shorted with investors closely watching every update.
After realising its much anticipated launch into China in Q4, Cettire had no update for shareholders. In an accompanying investor presentation the company said it was simply "taking a measured approach" to the market and looked to broaden its proposition over time.
The source: ASX announcement
