Cettire Ltd (ASX: CTT) shares are on the slide again on Wednesday.
At the time of writing, the ASX tech stock is down 6% to 68 cents.
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Why is this ASX tech stock sinking?
The catalyst for today's move has been the release of the online luxury products retailer's first quarter update before the market.
According to the release, gross revenue was down 1% on the prior corresponding period to $196.7 million and sales revenue was down 3% to $150.4 million. Cettire notes that gross revenue is revenue net of sales taxes but before customer refunds, whereas sales revenue is gross revenues net of allowances and customer refunds.
Cettire's weaker revenue reflects difficult trading conditions in the key US market, which was partially offset by growth in other markets.
In addition, the ASX tech stock's average order value increased 17% to $907, which helped offset an 8% decline in active customers 640,654.
Gross revenue from repeat customers represented 68% of total revenue. This is up 1 percentage point on the prior corresponding period.
Commenting on the company's performance during the quarter, its founder and CEO, Dean Mintz, said:
Despite the challenging industry backdrop, we have remained focused on executing our plan to profitably grow Cettire's share of the global personal luxury goods market. The Company has continued to deliver on its long-term strategy by growing its supply chain, further enhancing its technology platform and building the team.
The Company's ongoing localisation initiatives have further diversified our revenue. While the USA continues to experience some headwinds related to a softer consumer environment and changes in trade policy, Cettire's business outside of the USA experienced strong sales acceleration in the quarter, with gross revenue increasing 18% year-on-year (Q4 FY25: -1%).
Mintz also revealed that its margins have improved since the fourth quarter of FY 2025. This was driven by improvements in its marketing efforts, which ultimately led to the ASX tech stock recording positive adjusted EBITDA of $2.5 million for the three months.
This is a significant improvement on the previous quarter and led to Cettire ending the period with a net cash balance of $37.7 million.
Outlook
Commenting on the company's outlook, Mintz said:
In the short term, there continues to be uncertainty within the global personal luxury goods market, with softer demand and volatility in daily sales persisting, particularly within the USA, Cettire's largest market. The Company is continuing to focus on further geographic diversification of its revenue base, underpinned by its localisation strategy. Cettire remains relentlessly focused on its strategy to grow profitably while self-funding. Its immediate objective is to deliver ongoing profitability in Q2.
Cettire shares are down almost 70% over the past 12 months.
