Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cettire Ltd (ASX:CTT) reported a 12% increase in sales revenue, showcasing growth despite a challenging market environment.
• The company maintained a strong net cash position of approximately $101 million, with no debt, highlighting financial stability.
• Customer base grew by 21%, with a significant 67% of revenue coming from repeat customers, indicating strong customer loyalty.
• Cettire Ltd (ASX:CTT) achieved a record average order value of $821, reflecting increased customer spending.
• The company successfully expanded its presence in emerging markets, with a 32% growth in gross revenue from these regions.

Negative Points

• The global luxury goods market experienced a 2% decline, marking the first contraction in 15 years, impacting overall demand.
• Delivered margin decreased by 18% year-on-year due to heightened promotional activity, affecting profitability.
• Marketing spend was reduced, leading to a lower rate of new customer acquisition, which could impact future growth.
• The company faced challenges with inventory imbalances, which affected supply and demand dynamics.
• There is ongoing uncertainty in the global luxury market, with softening demand continuing to pose challenges.

Q & A Highlights

• Warning! GuruFocus has detected 1 Warning Sign with ASX:CTT.

Q: Can you elaborate on the growth in emerging markets and how it compares to the US market? A: Unidentified_2 (CEO): We're still early in these markets, which is why we're seeing strong growth. The growth reflects a normalization of our geographic revenue base in line with market opportunities. Emerging markets have a massive population and demand for luxury goods, contributing to this strong performance.

Q: What are your expectations for revenue growth and margins in the third quarter? A: Unidentified_3 (CFO): We haven't provided specific guidance, but trading has been patchy with periods of softness and recent momentum. We expect continued volatility this quarter and will update investors at the end of the third quarter.

Q: How are you addressing potential impacts from the US tariff regime? A: Unidentified_2 (CEO): It's early to speculate, but any changes will affect all market players equally. The US is important, but most of our markets already face tariffs, and we're growing strongly in those areas.

Q: Can you discuss the performance in specific markets and any changes in management focus? A: Unidentified_3 (CFO): Growth in emerging markets has been strong, particularly in the UK and parts of Asia like Japan, Hong Kong, Taiwan, and Singapore. The Middle East is also a key growth area. We're focusing on these markets due to their luxury relevance and early-stage business momentum.

Q: How has media and competitor focus impacted your competitive edge? A: Unidentified_2 (CEO): The focus is important, but the main issue is the widespread weakness in the luxury market. We're dealing with industry-wide challenges rather than specific competitive pressures.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.