Shares in Cettire Ltd (ASX: CTT) have fallen more than 18% today. This comes after the online luxury goods retailer posted a net loss for the first half due to weaker sales during what is traditionally its busiest period.
Cettire shares were changing hands for 36.5 cents on Thursday, down 18.9% on the day and well down on the high-water mark over the past 12 months of $1.14.
The company reported sales revenue of $382.8 million, down from $394 million for the previous corresponding period, and a net loss of $1.1 million, down from a $4.7 million profit.
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Warning signs
The company also included a "going concern" statement in its financial accounts, warning that its net current asset deficiency – its net current assets versus liabilities, which will fall due within 12 months – was $51.6 million in the red.
The accounts went on to say:
The net current asset deficiency and the net loss after tax for the current period gives rise to a material uncertainty in relation to going concern that may cast significant doubt on the Group's ability to continue as a going concern and to realise its assets and settle its liabilities in the ordinary course of business. Despite these material uncertainties, the directors have considered the performance and position of the Group and consider that the going concern basis is appropriate.
This view was based on several reasons, including the fact that the company had a net operating cash flow of $37.1 million and cash and cash equivalents of $61.4 million.
US law changes are not helping
Commenting on the first half result, chief executive officer Dean Mintz said it had been a challenging period.
The global luxury market has continued to face headwinds throughout H1-FY26, with persistent inflation pressure and subdued consumer confidence. Despite this backdrop, we have remained focused on executing our plan to grow Cettire's share of the global personal luxury goods market while remaining self-funding. During the half year, the impact from the removal of the de minimis exemption in the US contributed to ongoing challenges in our largest market. Notwithstanding this, the overall business was broadly stable year on year, supported by strong growth in regions outside of the US, which grew 13% year on year, further diversifying our global business.
The de minimis exemption was a loophole in US customs law that exempted goods valued at less than US$800 from duties and taxes.
Mr Mintz said on an underlying basis, the business had achieved a significant turnaround of more than $20 million in EBITDA, which was also a positive.
Regarding the outlook, the company said the global luxury trade remained uncertain, and its third-quarter gross revenues to date were down 13%, due to less promotional activity this year.
Cettire said it expected full-year sales revenue to be broadly similar to FY25.
