The Cettire Ltd (ASX: CTT) share price is under the spotlight today after revealing enormous growth in the FY23 third quarter.
Cettire is a global online retailer. It offers a “large selection” of personal luxury goods, with over 2,500 luxury brands, selling 400,000 products across clothing, shoes, bags and accessories.
Strong Q3 quarter
Sales revenue, which includes allowances and returns from customers, saw 108% growth to $101.5 million.
Cettire reported that the average order value increased by 8% to $744 million, which is good for overall organic growth and for improving the value of each customer. Revenue from repeat customers was 59%, up from 51% in the prior year.
The ASX share also said that active customers, which are customers that have made a purchase in the last 12 months, increased 42% year on year to 350,653 customers.
Profitability
Cettire’s strong quarter enabled it to generate adjusted EBITDA (EBITDA explained) for the four months to 30 April 2023 of at least $7 million, on a delivered margin of more than 20%. Sales revenue for the four months was 122% to $141.3 million.
Its marketing spending was in the high-single digits percentage of sales revenue.
In the first ten months of FY23, adjusted EBITDA was “at least” $23.7 million, after generating sales revenue of $329 million. That’s really good news for the Cettire share price, in my view.
The online retailer’s net cash balance was approximately $39 million at 30 April, reflecting the “settlement of trade payables from the seasonally larger December quarter.”
April update
April was a particularly strong month – it saw monthly sales revenue increase by approximately 160% year on year.
Management said they expect to maintain this growth rate for at least the rest of FY23. It also said that revenue from its emerging markets is outpacing the group’s revenue.
The company said it continues to focus on maximising profitable revenue growth.
Final thoughts on the Cettire share price
After the huge fall during 2022, the business is recovering. In the last 12 months it has risen by over 275% at the time of writing.
If sales revenue and EBITDA keeps growing rapidly, then the Cettire share price could keep rising.
How much will the business be able to grow? I’m not sure, but it seems like there’s plenty more growth potential with more buying by current customers and winning more customers.
It’s not the sort of business I’d buy for my own portfolio, but I think it’s one of the ASX growth shares to keep an eye on.
