The Cettire Ltd (ASX: CTT) share price has jumped 14% today. It’s actually up 66% over the last month.
What is Cettire?
After a very strong run – up 189% in the last six months alone – it now has a market capitalisation of $1.2 billion according to the ASX.
If you’ve never heard of Cettire, it is a global online retailer of a large selection of personal luxury goods through its website, Cettire.com. It sells over 160,000 products of clothing, shoes, bags and accessories and 1,300 luxury brands.
Major backers for the ASX retail share
According to reporting by the Australian Financial Review, a number of the richest Australians have invested some money into Cettire shares.
The AFR listed Tony Gandel, Alex Waislitz, Colin Bell and Penelope Seidler as some of its powerful backers.
There are also some institutional investors that are backing Cettire as well including Cat Rock Capital Management, Regal Funds Management and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). Soul Patts apparently owns just over 1.44% of the business.
Fast growth, beats prospectus guidance
The market also likes to consider guidance and performance when considering valuation, which may be a factor for the Cettire share price.
In the FY21 result, the luxury ASX retail share said that it beat the prospectus forecasts.
Let’s run through some of those numbers.
Reported sales revenue increased 304% to $92.4 million. In constant currency terms, that was an increase of 352%. Active customers grew 285% to 114,830. Around 40% of gross revenue came from repeat customers (up from 26% in FY20).
Cettire’s reported product margin was 37% and the delivered margin was 24%. In dollar terms, the product margin rose 307% to $33.8 million and the delivered margin jumped 243% to $22 million.
The business also reported significant growth of its core profitability metrics. Operating cashflow surged 131% to $12.7 million, whilst adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $2.1 million.
Management attributed the cashflow growth to its “exceptional” sales growth, a capital light business model and attractive working capital profile.
The profitability of the business may be part of an investor’s thoughts about the Cettire share price.
The business said that it launched its proprietary e-commerce storefront software in August 2021. Cettire is aiming for this to provide new capabilities to support the company’s global expansion. This is a key goal for the business.
Other initiatives include free returns for customers and expanding its total addressable market by entering the children’s wear segment.
The luxury ASX retail share has also started direct partnerships with brand owners.
Dean Mintz, the Cettire founder and CEO, said:
Whilst it is still very early in the development of our direct relationships with brand owners, this represents a natural progression of our business. We are excited by the potential of working directly with additional brand owners to complement our existing supply chain.