Cettire Flags US Tariff Impact Amid Soft Demand

Highlights:

• US Sales Hit by Tariffs: Cettire Ltd (ASX: CTT) reported weaker demand in the US, its largest market, due to heightened tariffs under President Trump’s administration.
• Earnings Slide Despite Revenue Uptick: Adjusted earnings fell by $4.7 million year-on-year, partly due to a $2.1 million forex loss, though revenue rose 1% to $192.50 million.
• Diversification Strategy Underway: The luxury e-retailer is accelerating efforts to reduce reliance on the US by expanding its global footprint.

Tariffs Weigh on US Sales

Cettire Ltd (ASX: CTT), the online luxury fashion platform, has flagged a decline in demand from its largest market, the United States, citing ongoing pressure from tariffs introduced by President Donald Trump's administration. According to the company’s latest update, sales in the US have become “more volatile” since Washington imposed heightened trade tariffs in April. This includes a slowdown even in product categories not directly affected by the duties.

The company further noted that while the new tariffs specifically targeting China-manufactured goods are expected to have a limited direct impact, the broader implications of these trade policies are clearly affecting consumer sentiment and buying patterns. In response, Cettire said it is intensifying efforts to diversify its revenue streams across different geographies.

Earnings Decline Despite Revenue Growth

Cettire reported a 1% year-on-year increase in sales revenue, reaching $192.50 million. However, adjusted earnings fell by $4.7 million, a figure that includes a $2.1 million hit from foreign exchange losses.

“While revenue growth was not maintained at H1 FY25 levels, Cettire’s growth is likely to outperform the luxury sector,” the company stated, highlighting that recent industry data suggests many major luxury brands are experiencing negative growth, particularly in the March quarter.

Focus Shifts to Global Expansion

At the time of writing, Cettire remains committed to expanding beyond the US to reduce reliance on any single market. The company’s strategy going forward will involve tapping into new regions and mitigating risks posed by trade policies and currency fluctuations. Investors will likely keep a close watch on how the retailer navigates these global headwinds while maintaining its premium positioning in the luxury e-commerce space.

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