The City Chic Collective Ltd (ASX: CCX) share price is plummeting on Tuesday after the All Ordinaries Index (ASX: XAO) company released a trading update for the fiscal year so far.
The clothing retailer revealed it's on track to post a small underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) loss for the first half of financial year 2023.
Perhaps unsurprisingly, the market is reacting poorly to the news. After opening 15% lower at 50 cents, the City Chic share price plunged to a new 52-week low of 44 cents – 25% below its previous close.
Fortunately, things have since picked up slightly. At the time of writing, the City Chic share price is back up at 48 cents – 18.64% lower than its previous close.
Let's take a closer look at the update that's seemingly disappointed investors today.
All Ordinaries retail share plummets on trading update
The City Chic share price is being pummelled as Australia looks to the holiday season – a key period for the company's earnings.
The All Ordinaries company revealed that, since its last trading update in November, conditions have remained volatile amid lower-than-expected demand.
As a result, it has upped its promotional activity to drive demand, and that's compressed its gross margins.
Meanwhile, its revenue for financial year 2023 so far is 7% lower than it was at the same point of last year – sitting at $157.1 million. However, it's up around 38% on that of financial year 2021.
Combined, the two factors are expected to lead City Chic to post a first-half EBITDA loss. Though, that's subject to the coming fortnight's trade, encompassing the remainder of the holiday season.
More positively, the company's confident its inventory will be at the lower end of previous guidance – $168 million to $174 million.
The company will provide a more detailed trading update in mid-January following the end of the reporting period.
City Chic share price snapshot
This year has taken a major toll on the clothing retailer's stock. The City Chic share price has tumbled 91% year to date. It's also down 90% over the last 12 months.
For comparison, the All Ordinaries Index has dropped 8% year to date and 5% since this time last year.
