City Chic Collective Limited

Reported revenue was $69.2 million, flat versus the prior corresponding period. Underlying EBITDA increased 86% to $6.5 million, up from $3.5 million, and trading gross margin rose 220 basis points to 62.2%; cost of doing business fell to 51% from 54%. ANZ revenue increased 7.4% and trading gross margin dollars rose 10.1%, while U.S. revenue declined 31% to $9.7 million but still contributed profit. The company generated $10.1 million in positive operating cash flow, held $5.4 million in cash, had an undrawn $10 million bank facility, reduced inventory by 21%, fully repaid drawn debt, and extended its facility to 31 March 2028. For the first 8 weeks of Q3, ANZ revenue was up 9% and trading gross margin dollars were up 17%; management said the U.S. is being re-stocked for summer '26 and expects profitable growth in Q4 and beyond, while Amazon's move to a marketplace model will create short-term revenue headwinds in the U.S. partner line.

Phil Ryan framed the half as proof that City Chic's simplified business model and product overhaul are working, especially in ANZ where better fit, quality and tighter promotions lifted gross margin and customer response. He emphasized the company is prioritizing its 'Cut for Curves' promise, high-value customers, and a more disciplined operating model, while using AI and assortment changes to improve design, allocation and marketing. His tone was constructive and confident, particularly on the long-term opportunity in the U.S. once inventory is reinvested.

James Plummer highlighted the jump in underlying EBITDA to $6.5 million, the $2 million reduction in cost of doing business, and the stronger margin profile driven by improved product ranges and full-price sell-through. He pointed to disciplined working capital management behind the $10 million operating cash flow, noted inventory was reduced as planned because of the U.S. purchasing pause, and said all drawn debt was repaid while the facility was extended to 31 March 2028. He also said the company met all clean-down covenants for FY '26, which gives the business stability and flexibility.

Analysts focused on the U.S. recovery path and how quickly reinvested inventory will translate into growth. Ryan said the U.S. held up better than expected despite very limited newness, with around 50,000 active customers still available for reactivation, and that new summer launches should start flowing from March into April-June. On Amazon, he explained the shift from wholesale to marketplace is meant to give the company more control over inventory, range and pricing, but it will likely pressure the U.S. partner revenue line in the second half before ramping in Q4.