SYDNEY–Shares in City Chic Collective Ltd. are on course for their third double-digit percentage fall in less than a month after the decline in the Australian clothing retailer’s sales accelerated.
City Chic on Tuesday said revenue for the first 24 weeks of its 2023 fiscal year fell 7% on year. Year-to-date revenue had been just 2% lower 20 weeks into the fiscal year, but revenue for the subsequent four weeks declined 24% on the same period a year earlier, it said.
The stock was down 14% at A$0.505 in early trade. It is 64% lower since the company warned of declining sales at its Nov. 25 annual shareholder meeting, wiping about 205 million Australian dollars (US$137.3 million) from its market capitalization.
The company’s shares fell by 28% on Nov. 25 and by another 26% in the following session. They are down more than 90% in 2022.
On Monday, City Chic said that it had increased promotional activity to drive demand, further compressing gross margins. It expects a small underlying earnings loss for the six months through December, compared with a A$23.5 million profit a year earlier.
Efforts to reduce inventory indicate that margin pressure is unlikely to abate soon, Ord Minnett Senior Research Analyst James Casey said in a note.
“This is a poor result with trading conditions deteriorating rapidly and the company’s overseas operations likely loss-making,” Mr. Casey said.