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The share price of ASX-listed online retailer Cettire (ASX: CTT) could see further gains with analysts noting its impressive web traffic trends compared to other luxury platforms.
While observers expect luxury platforms to face uncertainty in the remainder of the calendar year, CTT’s strong web presence could put it in a better position than its other online peers.
Analysts bullish on Cettire’s web traffic
Brokerage Bell Potter has highlighted the strength of CTT’s web traffic, which could enable it to weather ambivalent business conditions for online luxury sales platforms in the remainder of the year, particularly in the US market.
‘Recent trading updates/commentary from luxury online marketplaces/brands note expectations for continued macroeconomic uncertainties in the US through CY23 and a higher skew to 2H profitability amidst a heavily promotional seasonal period ahead (FY June/July ending),’ Bell Potter analysts said in a broker note in September.
‘However, we have seen the latest web traffic trends for US-based luxury department stores in comparison to mid-range peers showing some rebounding trends with the commencement of the Fall fashion season. We continue to see Cettire’s (CTT) 1Q24 to-date web traffic trends well ahead of other luxury platforms as the company grow their presence in both North America and emerging markets.’
For this reason, Bell Potter expects CTT to ‘continue to outperform their peer group.’
‘[Their] 0.5% market share in a large personal luxury goods market…could remain relatively resilient than other discretionary categories in the soft consumer environment.’
Cettire sees near 260% share price rise
CTT is an online luxury fashion retail platform that specialises in the sale of clothing, shoes and accessories. The company says it sells products from over 500 designers, as well as world-renowned brands including Prada, Gucci, Saint Laurent, Balenciaga and Valentino.
A key advantage touted by the company is its streamlined drop-shipping business model, as an online sales platform without any inventory overheads and its own proprietary technology.
According to CTT, this proprietary technology enables it to achieve ‘exceptional scalability for customer acquisition and automated order fulfilment.’
Founder and CEO Dean Mintz has said that CTT is a ‘highly nimble business, with a large flexible cost base.
‘This enables us to adjust quickly to market conditions and optimise performance,’ Mintz said.
The company’s share price has posted a strong performance since the gradual roll-back of Covid-related movement restrictions, which have helped give economies around the world further impetus and shore up consumer confidence.
According to its latest performance results, CTT managed to capitalise effectively upon the post-Covid the rebound in the global economy.
Its FY23 adjusted EBITDA came in at $29.3 million, as compared to a negative figure of -$21.5 million for FY22. Active consumer numbers surged in FY23, rising 63% over the previous period to 423K.
Consumers appear to be impressed with CTT’s offering, with 58% of gross revenue coming from repeat customers, as compared to 50$ in FY22.
According to CTT, return shoppers were characterised by ‘higher average spend per order and increased order frequency’ over the FY23 period.
CTT’s share price currently stands at $2.92, for an increase of nearly 260%, as well as a year-to-date rise of 132.80%.
Bell Potter has retained a buy rating for CTT with a price target of $4.00, for a potential upside of around 37%.
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