City Chic H1 FY26 Earnings Webcast

Signs of Stabilisation

City Chic Collective Limited (ASX:CCX), an Australian-based global omni-channel retailer focused on plus-size women's apparel, footwear, and accessories, has been navigating a multi-year turnaround following years of challenges including inventory overhang, cost pressures, and uneven performance across markets.

In FY25, the company delivered a significant improvement, swinging underlying EBITDA from a loss of around $8.4 million to a profit of $6.4 million on modest revenue growth of 2.3% to $134.7 million. This progress stemmed from refreshed product ranges, higher average selling prices, better full-price sell-through, and aggressive cost reductions totalling $22.3 million annually.

The momentum carried into early FY26, with ANZ revenue up 8.7% in the first eight weeks and the US business remaining profitable despite moderated expectations. However, the January 2026 H1 trading update revealed global sales revenue of $69.2 million for the 26 weeks to 28 December 2025—down slightly 0.5% year-on-year. Strong ANZ performance, including 7.4% trading revenue growth and a 10.1% gross margin expansion to 62.2% group-wide, was offset by a deliberate reduction in Americas revenue to mitigate tariff-related volatility.

This caution reflects broader trade uncertainties, likely tied to potential US import tariffs affecting apparel supply chains. Inventory fell 21% through tighter purchasing, supporting a healthier balance sheet with net cash of $5.4 million and no drawn debt.

Analysts project the company may still post a final loss in FY26 before turning profitable around AU$3-4 million in FY27, requiring aggressive growth. The stakes involve sustaining investor confidence in a small-cap stock that has seen sharp volatility, with share price reactions to updates often swinging double-digit percentages.

Non-obvious tensions include the trade-off between protecting margins in the US—where the business has been restructured for lower fixed costs—and the risk of ceding market share if competitors absorb tariff costs or if conditions stabilise faster than anticipated. Meanwhile, reliance on ANZ growth, including new store openings (six to eight planned for FY26) and partnerships like Myer Marketplace, highlights vulnerability if domestic consumer spending weakens further amid cost-of-living pressures.