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Luxury goods e-commerce platform Cettire (ASX: CTT) has managed to lift underlying profit in the first quarter of FY26, despite a drop in sales and active customers.
The company, which operates a dropshipping model, suffered a 3 per cent drop in sales to $150 million for the first three months of this financial year due to softer demand for luxury fashion items and volatility in daily sales.
Cettire, which sells brands such as Gucci, Versace, Max Mara, Dolce & Gabbana and Valentino, also was hit by an 8 per cent drop in active customers to about 641,000 during the period.
Cettire had 657,000 active customers at the end of June this year, with the latest data showing a loss of 16,000 customers or 2.4 per cent in the past three months. The company had 692,000 active users at the end of FY24.
Cettire says while this fall reflects “more conservative marketing investment”, there was strong gross revenue contribution from repeat customers during the September quarter.
“Despite the challenging industry backdrop, we have remained focused on executing our plan to profitably grow Cettire’s share of the global personal luxury goods market,” says Cettire CEO and founder Dean Mintz.
“The company has continued to deliver on its long-term strategy by growing its supply chain, further enhancing its technology platform and building the team.”
Mintz says “localisation initiatives” have helped diversify revenue.
“While the USA continues to experience some headwinds related to a softer consumer environment and changes in trade policy, Cettire’s business outside of the USA experienced strong sales acceleration in the quarter,” he says.
Cettire has revealed that gross revenue excluding the US rose 18 per cent compared to a year earlier, although it was 1 per cent lower than the June quarter of FY25.
However, the company notes that margin as a percentage of sales was 15 per cent for the quarter, an improvement on the June quarter.
Marketing initiatives delivered string returns for the group, which also led to a drop in marketing spend relative to sales, which landed at under 6 per cent in the latest quarter.
This led to adjusted EBITDA of $2.5 million for the quarter, up about $500,000 from a year earlier.
The company’s net cash balance was $37.7 million at the end of September.
Cettire sees continued uncertainty over the near term for the personal luxury goods market globally, with softer demand and volatility in daily sales persisting, particularly in its largest market, the US.
“The company is continuing to focus on further geographic diversification of its revenue base, underpinned by its localisation strategy,” says Cettire, adding that its immediate focus is to follow up with another underlying profit in the current quarter.
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