City Chic Collective Limited reported a half-year loss of $3.532 million for the period ending December 2025, slightly wider than last year, but underlying EBITDA surged 84% driven by improved margins and cost discipline. The company also fully repaid its debt and maintained a strong cash position.
- Half-year loss of $3.532 million, marginally higher than prior year
- Underlying EBITDA from continuing operations up 84% to $6.503 million
- Full repayment of all debt during the period
- Strong cash balance of $5.4 million and undrawn $10 million facility extended to 2028
- US business remains profitable amid tariff-related inventory adjustments
Financial Performance Overview
City Chic Collective Limited has released its half-year results for the 26 weeks ending 28 December 2025, revealing a modestly increased loss of $3.532 million compared to $3.493 million in the prior corresponding period. Despite this, the company’s underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) from continuing operations saw a remarkable 84% uplift to $6.503 million, signalling improved operational efficiency and profitability momentum.
The improved EBITDA was underpinned by better gross margins and higher average selling prices, reflecting successful product elevation initiatives that resonated well with City Chic’s customer base. The company’s focus on high-value customers and disciplined cost management helped offset ongoing challenges in the retail environment.
Debt Repayment and Cash Position
In a significant balance sheet development, City Chic fully repaid all outstanding debt during the period, leaving it with a robust cash balance of $5.4 million at the half-year mark. Additionally, the company’s $10 million debt facility remains undrawn and was extended through to March 2028, providing ample liquidity and financial flexibility to support future growth initiatives.
This deleveraging effort reduces financial risk and positions City Chic well to navigate any economic uncertainties ahead, while maintaining the capacity to invest in its omni-channel retail operations across Australia, New Zealand, and the USA.
Operational Highlights and Market Dynamics
The US segment of City Chic’s business continued to contribute profitably, despite tariff-related inventory volatility. Management’s deliberate inventory reduction strategy in response to these tariffs helped maintain resilience in the US market, particularly within direct-to-consumer channels.
Meanwhile, the Australia and New Zealand operations sustained steady revenue levels, supported by a network of stores and online platforms catering to plus-size and women’s apparel. The company’s omni-channel model remains central to its strategy, blending physical retail with digital marketplaces and wholesale partnerships.
Outlook and Governance
City Chic’s directors confirmed no significant changes in the state of affairs during the period and no material events post-reporting date. The company did not declare or pay any dividends, reflecting its focus on strengthening the balance sheet and investing in growth.
The financial statements were reviewed by auditors RSM Australia Partners without qualification, affirming the integrity of the reported results. Executive incentives were adjusted with a new long-term performance rights plan introduced for FY26, aligning management rewards with future profitability targets.
Bottom Line?
City Chic’s improved EBITDA and debt-free status mark a turning point, but the path to sustained profitability remains a key watchpoint.
Questions in the middle?
- Can City Chic sustain EBITDA growth and convert it into net profit in upcoming periods?
- How will tariff-related inventory strategies impact US market performance long term?
- What are the implications of the new executive incentive plan on management’s strategic priorities?