Australia's City Chic H1 FY26 EBITDA jumps on strong ANZ momentum

The improvement was supported by strong Australia and New Zealand (ANZ) performance, margin expansion and disciplined cost management. Trading gross margin reached 62.2 per cent, up 220 basis points compared with the prior corresponding period, alongside a 6.1 per cent increase in average selling price.

In the ANZ region, revenue increased 7.4 per cent YoY, driven by improved product performance and consumer demand. Trading gross margin dollars grew 10.1 per cent, supported by stronger full-price sell-through and tighter promotional activity, while comparable sales advanced 4.2 per cent. High-value customers represented 58 per cent of the active base, highlighting strengthening customer engagement, City Chic Collective said in a press release.

Conversely, Americas revenue declined 31.4 per cent to $9.7 million, reflecting a deliberate reduction in purchasing amid tariff-related volatility. The lower inventory levels particularly affected partner channel sales that rely on fresh product launches. Inventory across the group fell to $24.6 million, down 21 per cent YoY, primarily due to the strategic reduction in the US market.

City Chic ended the half with net cash of $5.4 million, up 84 per cent from June 2025, after repaying $5.0 million in borrowings. The company’s $10 million debt facility remains undrawn and has been extended to March 31, 2028, strengthening liquidity and financial flexibility. The board opted not to declare an interim dividend as it prioritises sustainable growth and financial resilience.

Phil Ryan chief executive Officer and managing director said, “Disciplined execution against our strategy delivered profitable growth and positive operating cash flow in the half. Our successful focus on brand elevation, high-value customer engagement and margin discipline has put us back on a pathway to sustainable growth.

“This positive trajectory in ANZ continued in the first eight weeks of the second half, with revenue up 9 per cent and trading margin up 17 per cent compared to the prior period. The USA business remains profitable, and Summer 2026 inventory has been ordered to support a return to higher sales levels in Q4 FY26.

“During the half, we fully repaid our debt, meeting all clean-down covenants for FY26 and finishing December with net cash of $5.4m. We also extended our $10 million debt facility through to March 31, 2028, while maintaining our existing covenant arrangements.”

Trading momentum has continued into the early weeks of the second half of FY26, with ANZ revenue rising 9 per cent and trading gross margin dollars increasing 17 per cent YoY. The US market remains in transition, with sales declining as planned ahead of a fourth-quarter relaunch supported by new product orders and channel strategy adjustments.

The company is also progressing the shift of Amazon to a marketplace model and launched its Belk marketplace presence in February 2026 to expand distribution and enhance brand visibility ahead of the planned reset. Meanwhile, evolving tariff developments could result in a 5 per cent reduction in duties on goods entering the US from China, though the company noted that this currently does not alter strategic timelines.

Fibre2Fashion News Desk (SG)