Cettire share price jumps 13% on explosive Q3 sales growth

This online retailer delivered strong revenue growth in the third quarter. But what about its earnings?

| More on:
A woman jumps for joy with a rocket drawn on the wall behind her.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Cettire Ltd (ASX: CTT) share price is ending the week with a bang.

In morning trade, the online luxury products retailer's shares are up 13% to $3.79.

Why is the Cettire share price jumping?

Investors have been fighting to get hold of the company's shares on Friday after it released another impressive quarterly update.

According to the release, for the three months ended 31 March, Cettire's gross revenue increased 95% over the prior corresponding period to $256.7 million.

Also growing strongly was its sales revenue, which increased 88% over the same period last year to $191 million.

This strong top-line growth was underpinned by an 84% increase in active customers ~644,000 and a continued strong gross revenue contribution from repeat customers. A 12% increase in average order value to $832 also supported its sales growth.

Management highlights that its US business continues to demonstrate excellent momentum. Its year with year-on-year gross revenue growth accelerated in the third quarter compared with the year-on-year growth rate achieved during the first half.

Furthermore, since the implementation of the company's updated checkout on 19 March, Cettire has observed stable conversion rates in the key market.

In addition, it has experienced continued strong growth in its available inventory, with the total database of unique products and seller stock value observing a noticeable step-up during the period.

Commenting on the quarter, Cettire's founder and CEO, Dean Mintz, said:

This result reflects continued strength in Cettire's quarterly performance, with ongoing momentum in sales revenue, active customer growth and conversion to profit. Cettire continues to rapidly drive market penetration across its global footprint.

Market conditions remain constructive and we have supplemented our strong customer proposition with marketing investment. Further, our increased focus on traffic quality has driven significant year-on-year improvement in conversion rate and an uplift in average order values.

What about earnings?

Failing to hold back the Cettire share price today is a somewhat underwhelming earnings update.

Cettire revealed that its unaudited adjusted EBITDA came in at $6 million for the three months on a delivered margin greater than 20%.

This compares unfavourably to first half adjusted EBITDA of $26.1 million on a delivered margin of 23.2%.

However, Mr Mintz highlights that the quarter is its seasonal low point. He explains:

Our business is execution focused. We continue to operate the business to maximise revenue growth, whilst also delivering profitability and cash generation. Whilst Q3 is traditionally a seasonal low point, we observed a strong improvement in year-on-year profit trends.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Technology Shares

A man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.
Technology Shares

2 ASX tech stocks to buy during an anticipated 15% to 20% sector pullback in 2025

Expert reveals 2 of his favourite tech stocks and at what prices we should buy them during a dip.

Read more »

A man leans forward over his phone in his hands with a satisfied smirk on his face although he has just learned something pleasing or received some satisfying news.
Technology Shares

Life360 shares: A generational opportunity to get rich?

I think the Life360 share price could more than double again in the year ahead.

Read more »

a woman sitting at a desk checks an old fashioned calendar resting against her wall as she sits with documents in front of her.
Technology Shares

Own WiseTech shares? You need to know about these dates in 2025

Put these dates in your calendar.

Read more »

a young child wearing a cardigan and thick black glasses places his hand on a nearly rounded object and his hair lifts at right angles to his head thanks to static electricity.
Technology Shares

Up 223% in a year, why this ASX 200 tech stock could keep surging higher in 2025

A leading expert expects the ASX 200 tech company to provide strong 2025 earnings guidance.

Read more »

Man with rocket wings which have flames coming out of them.
Technology Shares

Pro Medicus shares jump to record high on big news

This high-flying stock keeps breaking records. Here's what is happening today.

Read more »

man thinking about whether to invest in bitcoin
Technology Shares

Should you buy WiseTech shares before earnings season?

Is this tech star a buy? Let's see what analysts are saying about it.

Read more »

A woman sits at her home computer with baby on her lap, and the winning ticket in her hand.
Technology Shares

Could this undervalued ASX stock be your ticket to millionaire status?

I reckon this stock is on track to deliver significant growth.

Read more »

Technology Shares

2 of the best ASX 300 stocks to buy now

Bell Potter has named these as best buys. Here's what you need to know.

Read more »