The City Chic Collective Ltd (ASX: CCX) share price has rocketed over 1,000% higher since the start of 2018 – but does the Aussie fashion group have more growth to give?
Why the company's share price has rocketed higher
The share price is currently trading at $1.59 per share but has reached as low as $0.25 (February 2009) and $0.11 (December 2017) in something of a rollercoaster for its investors.
The company, previously known as Specialty Fashion Group, soared 586% in 2018 on the back of strong earnings results as well as the fact it was rebounding off a low base.
The company's FY18 results included the following:
- Full-year revenue of $132 million underpinned by strong margins
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $19.9 million
- Same-store sales growth of 12.9% on prior corresponding period (pcp)
While a 350% capital return in one year is astronomical, the company has continued its tearing run on the markets in 2019 to be up over 1,000% since January 2017.
The Aussie fashion group posted another strong result in a testament to management's turnaround following the significant restructure and simplification of operations.
The 1H19 highlights included:
- Sales revenue 7% higher on pcp to $75.4 million
- Underlying EBITDA 22% higher on pcp to $15.8 million
- Gross profit margin up 100 basis points (bps) to 60.4%
- Net profit after tax (NPAT) came in at $10.1 million
- Nearly doubling the company's net cash position from 1H19 to $35.5 million
Importantly for investors, City Chic recommenced its dividend payouts with a fully-franked 2.5 cents per share (cps) dividend and a 2.5 cps special dividend announced at the half.
The company's share price is up 59% this year alone and has shown no signs of slowing down since its strong results announcement in February.
The company is trading near its 52-week high of $1.64 per share and may be a touch on the expensive side with a P/E ratio of 20.4x earnings.
I'm generally not bullish on the Consumer Discretionary sector, and I'd instead be checking out this top-rated stock in a growing $22 billion industry that could be the perfect portfolio fit.
