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The CEO and CFO of luxury dropshipper Cettire (ASX: CTT) will see a "material" rise in their base salaries for the first time in five years as the Melbourne-based company grapples with a statutory loss of $2.6 million, a decline in active customer numbers and difficulties with US new trade policies.
The company has also announced that independent non-executive director Daniel Agostinelli - currently the CEO of Accent Group (ASX: AX1) - has handed in his resignation at Cettire after only joining the company in April.
After results flipped into the red from a $10.5 million profit in FY24, and heightened promotional activity led to an almost 5 percentage-point drop in delivered margins to 16.1 per cent of its $975.3 million worth of sales, Cettire finds some solace in a "broadly stable" gross revenue despite challenging market conditions.
The company notes a mix of macroeconomic, foreign exchange and consumer uncertainty, particularly in the US, further amplified volatility in a demand environment that had already softened for personal luxury goods.
The latter, combined with a reduction in paid marketing, led Cettire's active customer numbers to fall 5 per cent to 656,569.
Meanwhile, it was also announced that from today there would be further exclusions around De Minimis exemptions in the US which have allowed for the duty-free treatment of shipments worth less than US$800, culminating in the suspension announced this week by Australia Post for its Business Contract, MyPost Business and Retail customers who ship to the US market.
Elsewhere, the group notes gross revenue from emerging markets continues to grow strongly, now representing 37 per cent of gross revenues with outsized growth in Asia and the Middle East, where successful launches took place in Kuwait and Bahrain during the financial year.
It is against this backdrop that the company has also announced a material amendment to executive compensation arrangements, with founder and CEO Dean Mintz's base salary rising more than 96 per cent to $850,000, and CFO Timothy Hume's base salary up 52 per cent at $550,000.
"Since the previous arrangements were implemented, Cettire has grown significantly in scale and complexity, with revenue increasing from $23 million in FY20 to $742 million in FY25 and the Company expanding its presence to 56 countries," the company stated.
"The board has performed a benchmarking analysis against comparable companies in developing the revised remuneration arrangements."
Cettire claims it is positioned for improved profitability in FY26 following a series of fixed and variable cost initiatives including areas such as freight costs and merchant fees, which have streamlined operations.
"Resilience is an important theme in current market conditions. The company has already made considerable progress in growing and diversifying its supply chain, improving its technology and adding to its exceptional team," says founder and CEO Dean Mintz.
"As our localisation initiatives gain traction, the revenue base will continue to geographically broaden, which in turn enhances Cettire’s ability to withstand different challenges."
Mintz says the company is "relentlessly" focused on driving profitable revenue growth while expanding its global footprint and remaining self-funding.
"Looking forward, as demand improves and we continue to invest in scaling the business, I remain incredibly confident in our ability to drive significant profitable growth in the future," he says.
"We have an unparalleled business model which is well placed to navigate the challenges presented by current market conditions."
Regarding the departure of Daniel Agostinelli, Cettire's chairman Steven Fisher says he has "played an important role in board deliberations since his appointment, sharing his wealth of retail experience".
"The board extends its sincere thanks and appreciation to Daniel for his contribution to Cettire during FY25 and respects his decision to devote his time to his current executive commitments."
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