City Chic Collective Ltd (ASX: CCX) has announced its FY20 result which showed strong revenue growth.
City Chic sells plus-size clothes for women, as well as footwear and other accessories.
City Chic announced that it grew revenue by 31% to $194.5 million with comparable sales growth of 0.4%, which includes the period of when stores were shit.
Its global customer base grew by 72% to 663,000 people. Online sales made up 65% of total sales. Online website growth globally was 113.5%.
The company is growing strongly in the northern hemisphere. Northern hemisphere sales made up 42% of global sales, up from 20% in FY19, driven by the Avenue acquisition.
Underlying EBITDA (click here to learn what EBITDA means) grew by 6.6% to $26.5 million. However, statutory profit before tax from continuing operations fell 13% to $16.7 million.
The scalability of the business showed with the underlying cost of doing business excluding share-based payments falling to 33%, down from 40.9% in FY19.
At the end of the year it had net cash of $3.9 million which was strengthened with a $111.1 million capital raising after the year end to help fund further acquisitions.
Currently, the company’s Victorian and Auckland stores are shut due to COVID-19 restrictions. The rest of its store network is open. City Chic has been eligible for jobkeeper for the first six months, but it doesn’t expect to be eligible for the October extension of jobkeeper.
The company didn’t pay a final dividend.
In FY21 the company has seen positive comparable sales growth and the Avenue customer base is “resilient”. However, COVID-19 impacts are causing uncertainty.
The company will continue its acquisition strategy with Catherines and perhaps other brands. It’s planning new stores and converting to larger format stores. It also plans to expand its lifestyles and categories online.
City Chic is a very promising ASX retail business, I’d be happy to buy shares at the current City Chic share price for the long term. I also like other global ASX growth shares like Pushpay Holdings Ltd (ASX: PPH) and BWX Ltd (ASX: BWX).