City Chic Collective delivered a substantial profitability turnaround in FY26, with underlying EBITDA surging 92 percent to $12.3 million, demonstrating the fashion retailer’s ability to extract meaningful earnings growth from operational efficiency and margin expansion even as global sales contracted 3.1 percent to $130.5 million. This disconnect between revenue decline and earnings growth is the headline result investors needed to see, signaling that management’s strategic focus on cost discipline and higher-margin product is working in a challenging retail environment.
The revenue decline masks a more nuanced regional picture. The ANZ division, where the company generates the vast majority of revenue at $113.8 million, actually grew 7.6 percent while achieving comp store sales growth of 11.4 percent, suggesting the domestic market is responding well to the company’s differentiated “Cut for Curves” positioning. By contrast, the USA segment remains in reset mode, with revenue of $16.7 million reflecting deliberate inventory management and repositioning efforts, though management flagged that the region is now primed for growth in FY27.
The margin expansion is the most impressive element of the result. Trading gross margin expanded 209 basis points to 60.6 percent, while underlying cost of doing business fell 9.7 percent and now represents 51.7 percent of sales. The company achieved this through agile supply chain improvements, new test and learn factory models that reduce time to market, and AI-powered merchandising tools that boosted average selling prices 4.5 percent year on year. These operational levers appear disciplined and structural rather than one-time gains, which supports sustainability in future periods.
On the customer front, City Chic maintained momentum with 517,000 active customers, a 3 percent increase, while high-value customer targeting grew 8 percent and net promoter score reached 76. Inventory was tightly managed, declining 11 percent to $24.1 million ahead of the USA summer reset. The balance sheet strengthened materially, with net cash rising 75 percent to $5.2 million, the debt facility remaining undrawn at period end and extended to March 2028, and the first seven weeks of FY27 already generating positive cash flow of $2.2 million.
Investors should monitor whether ANZ comp store sales momentum can sustain, whether the USA turnaround delivers promised growth in FY27, and crucially, whether the company can maintain or expand its newly achieved margin profile as it scales revenue. This announcement constitutes price sensitive information and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About City Chic Collective Limited (ASX: CCX)
City Chic Collective Limited is a plus-size women’s fashion retailer offering apparel, footwear, and accessories under the City Chic brand. The company operates in Australia, New Zealand, and the United States through retail stores, online platforms, and wholesale channels. It was incorporated in 1992 and is headquartered in Alexandria, Australia.
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