CCX - City Chic Collective

[finicky]

Whoops, up almost 12% intraday, a very strong daily move.
Unconvinced yet as this translates only to an indecisive weekly candle so far and interestingly this daily move so far only reaches my critical level of $5. Could be just a 'retest'. I am rattled though, a fast recovery above $5 was a scenario I feared in trying to call it. You might not see me again on this thread, lol

Daily

 

[finicky]

H1 FY22 report looks great, particularly revenue growth in the USA. EBITDA flat though cf H1 FY21 due to all sorts of unusual costs.
Clothes for disguising fat women in western societies, got to be a growing market for sure until plant based diets really gain ground.

 

[Miner]

H1 FY22 report looks great, particularly revenue growth in the USA. EBITDA flat though cf H1 FY21 due to all sorts of unusual costs.
Clothes for disguising fat women in western societies, got to be a growing market for sure until plant based diets really gain ground.

View attachment 135759

I was slack on action to buy when I posted ! Damn

 

[finicky]

@Miner did you know a trading update was coming up? Only possible clue to me was the type of candle and twice average volume on Wednesday - maybe I can learn something from it.
Just had a look at the basic financials and at +5 times book value looks overvalued on good but declining returns on equity - 14% ROE FY21. Price is already counting in growth?
Almost everything looks overpriced to me though, including all my own non speculative earning stocks.

Daily

 

[Miner]

@Miner did you know a trading update was coming up? Only possible clue to me was the type of candle and twice average volume on Wednesday - maybe I can learn something from it.
Just had a look at the basic financials and at +5 times book value looks overvalued on good but declining returns on equity - 14% ROE FY21. Price is already counting in growth?
Almost everything looks overpriced to me though, including all my own non speculative earning stocks.

Daily
View attachment 135773

@finicky
No. I knew nothing excepting found the stock performance was under compared to what I read.
But I was not brave to buy at the prevailing price and put a lower purchase price only to see 12 pc rise.
Damn. But many a times I bought like bwx only to see prices went further.
That's market

 

[Miner]

Without any news CCX slumped significantly compared to rest of falling trend today.
Could there be an export market to Russia that we do not know ?

 

[galumay]

A clothes retailer at over 60 PE! With debt. Great while it lasts, then look out!

(I own one of these clothes horses, GLB, similar crazy multiples. Its all about the cost base, my concern is for those tempted to buy at these prices.)

I hate to say 'I told you so'.

 

[Country Lad]

I probably shouldn't be commenting as I am not really a chartist, I just fool around with trends and patterns. It looks to me like possible support around the $4 mark and of it goes below the high $3s then $2.50.

Nearly there.

 

[Greynomad99]

Re Finicky's post - sounds like good analysis as stock hit $3.00
Interesting that an extension of the last step up also predicts the exact low it has achieved. Will it be the bottom? In this market I'm not betting on anything, but I'd say there is a passable chance that will be the case. $3.00 (or close to it) has been a historical resistance level - so now support.

 

[Miner]

Today CCX was the second best from the bottom.
Have not followed CCX but noticed, a lot happened in the last couple of months
Only in Feb, one director spent some pocket money buying 50,000 shares @$3.02

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02500225-2A1363597?access_token=83ff96335c2d45a094df02a206a39ff4

But Australian Super increased 2% of its holding also - what was the quality of research of this top fundi ??

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02494763-2A1360763?access_token=83ff96335c2d45a094df02a206a39ff4

Should I trust the following technical analysis for next month ?

 

[finicky]

City Chic has thrown a couple of weekly reversal type candles over the last 3 weeks so a rally wouldn't completely surprise, but whether it actually happens, or if it does would have legs as something more substantial I am clueless on.

Only posting because it was part of the discussion in recent 27 May Livewire article:
Buy Hold Sell: 5 discounted growth stocks

City Chic (ASX: CCX)​

James Marlay: Slightly different tech now we're going for City Chic Collective. It must have been one of the most popular and well earned retailers in the market. Buy, hold, or sell? It's down 60% in 2022. Josh Clark (HOLD): Yeah. That's brutal. It's painful just to think about. It's a hold for me, City Chic. It looks way too cheap. If they can continue their previous growth trajectory, then you would buy it. But naturally it's down for a reason. They've got a lot of inventory coming into the balance sheet, so that's going to weaken the balance sheet. I think the jury is still out in terms of what gross profit margin they're going to be able to clear that inventory at how long it's going to take them and what the balance sheet's going to look like on the other side of that. So I think those question marks mean that you need to hold off for the moment. You probably need to see a result or two for some evidence. There's a lot of other things to like, but for the moment, I think it's just a hold. James Marlay: Hold on, City Chic. Buy, hold or a sell for you, Gary? Gary Rollo (SELL): I can make a case for all three, but if I had to pick one, I'd say it's a sell now. Now this is a quality small cap and I think you mentioned the point that most small cappers look at that business and say they want to own it and we are no different, but we're not in normal markets just now. We're in an area, the consumer discretionary area, that's an area where you're going to have significant uncertainty on demand to play out. You have to ask yourself if you want to take that on. Even in a stock that you'd like to get invested in and our view at the moment is no, we won't take that on. We'll wait and come back another day to buy that business so that's what we've decided. It's a sell.

Weekly

 

[Miner]

City Chic has thrown a couple of weekly reversal type candles over the last 3 weeks so a rally wouldn't completely surprise, but whether it actually happens, or if it does would have legs as something more substantial I am clueless on.

Only posting because it was part of the discussion in recent 27 May Livewire article:
Buy Hold Sell: 5 discounted growth stocks

City Chic (ASX: CCX)​

James Marlay: Slightly different tech now we're going for City Chic Collective. It must have been one of the most popular and well earned retailers in the market. Buy, hold, or sell? It's down 60% in 2022. Josh Clark (HOLD): Yeah. That's brutal. It's painful just to think about. It's a hold for me, City Chic. It looks way too cheap. If they can continue their previous growth trajectory, then you would buy it. But naturally it's down for a reason. They've got a lot of inventory coming into the balance sheet, so that's going to weaken the balance sheet. I think the jury is still out in terms of what gross profit margin they're going to be able to clear that inventory at how long it's going to take them and what the balance sheet's going to look like on the other side of that. So I think those question marks mean that you need to hold off for the moment. You probably need to see a result or two for some evidence. There's a lot of other things to like, but for the moment, I think it's just a hold. James Marlay: Hold on, City Chic. Buy, hold or a sell for you, Gary? Gary Rollo (SELL): I can make a case for all three, but if I had to pick one, I'd say it's a sell now. Now this is a quality small cap and I think you mentioned the point that most small cappers look at that business and say they want to own it and we are no different, but we're not in normal markets just now. We're in an area, the consumer discretionary area, that's an area where you're going to have significant uncertainty on demand to play out. You have to ask yourself if you want to take that on. Even in a stock that you'd like to get invested in and our view at the moment is no, we won't take that on. We'll wait and come back another day to buy that business so that's what we've decided. It's a sell.

Weekly

View attachment 142293

I used to listen Livewire intently.
After getting confused one says buy and other says sell , I reached to one of the famous contributors.
He did reply nicely.
Because the basis of recommendation does not state teem of reference short, medium or long, so relying on what they say to live wire would not be right to base one's decision.
I liked the response and sense then use my own and discard the head and tell opinions.
Do not hold ccx

 

[Dona Ferentes]

Without any news CCX slumped significantly compared to rest of falling trend today.
Could there be an export market to Russia that we do not know ?

Ah the good old days when CCX was above $3.

City Chic Collective Limited FY22 Results

• Sales Revenue of $369.2m up 39.0%; comparable sales growth up 25.5%
• Underlying EBITDA of $47.1m up 11.3% vs FY21 representing a 12.8% margin
• Statutory NPAT of $22.3m up 4.7% vs FY21 with Underlying NPAT of $28.5m up 14.5% vs FY21
• Global customer base up 30% vs FY21 to 1.4m active customers, with growth in all regions
• Global customer website traffic growth of 35% YoY to 78.6m visits
• Online comparable sales growth of 33.8%, with 82% online penetration
• Geographic diversification with 56% of revenue from Northern Hemisphere
• Partner business grown to $30m for FY22, $22m in the second half
• Strategic investment in inventory to manage global supply chain volatility and support continued revenue growth
• Acquisitions of European plus-size online marketplace Navabi (July 2021) and USA plus-size marketplace CoEdition (December 2021)
• Expanded funding flexibility with new $60m debt facility

And doesn't that all sound tickety-boo! Surging ahead in all sectors, all continents, all mediums.

And yet, and yet...........

 

[Smurf1976]

And doesn't that all sound tickety-boo! Surging ahead in all sectors, all continents, all mediums.

And yet, and yet...........

I’m thinking it might be related to market expectations for the sector going forward, on account of broad economic trends, rather than any problem specific to the company?

Just my two cents. Do not hold but have been watching.

 

[Dona Ferentes]

I’m thinking it might be related to market expectations for the sector going forward, on account of broad economic trends, rather than any problem specific to the company?

There was an outlook, that basically said it could get tough; with the volume going through, maybe a few insto's saw a gap between what they hope for and what the target could be.

FY23 Outlook
In FY23 City Chic expects to deliver another year of profitable growth notwithstanding ongoing global economic and geopolitical uncertainty. This is underpinned by City Chic’s expanded market penetration across geographies and channels, category leadership globally and investment in its distribution infrastructure.
To hedge against anticipated promotional activity within the plus market globally, City Chic is leveraging its unique market position to implement, where appropriate, retail price increases to mitigate the risk of margin compression and to continue to grow market share.
City Chic expects inventory to normalise and is targeting $125-135m at the end of FY23, with strong cash generation delivering a positive net cash position in the second half

Just my two cents. Do not hold but have been watching.

 

[Miner]

Ah the good old days when CCX was above $3.

City Chic Collective Limited FY22 Results

• Sales Revenue of $369.2m up 39.0%; comparable sales growth up 25.5%
• Underlying EBITDA of $47.1m up 11.3% vs FY21 representing a 12.8% margin
• Statutory NPAT of $22.3m up 4.7% vs FY21 with Underlying NPAT of $28.5m up 14.5% vs FY21
• Global customer base up 30% vs FY21 to 1.4m active customers, with growth in all regions
• Global customer website traffic growth of 35% YoY to 78.6m visits
• Online comparable sales growth of 33.8%, with 82% online penetration
• Geographic diversification with 56% of revenue from Northern Hemisphere
• Partner business grown to $30m for FY22, $22m in the second half
• Strategic investment in inventory to manage global supply chain volatility and support continued revenue growth
• Acquisitions of European plus-size online marketplace Navabi (July 2021) and USA plus-size marketplace CoEdition (December 2021)
• Expanded funding flexibility with new $60m debt facility

And doesn't that all sound tickety-boo! Surging ahead in all sectors, all continents, all mediums.

And yet, and yet...........
View attachment 145934

CCX is doing successful retreat with ambitious plans

 

[Miner]

whats up with CCX again ? Liquidation ??

 

[Tommy Shelby]

Pretty astounding decline - but the AGM comments were a mess and didn't give any confidence about the current market conditions right now let alone the forecast for next year.

I understand that current rate rises are smashing retail but they've been growing much faster than other retailers with better margins.

Currently trading at 5 x EBIT...

 

[Miner]

some update to support my tip for Dec

 

[Tommy Shelby]

Couple factors have led to the price movement over the last week beyond the general market movements...

CCX bought two businesses last year but either didn't appreciate the logistical nightmare that is 3PL or couldn't stay on top of the growth but this has been a big reason for the inventory build up. They've hired more senior execs who have logistics experience etc to fix but that will take 6 months to resolve. I wouldn't be surprised if there were some write downs or realisations that the inventory count is wrong etc.

CCX's closest competitor in the US (I believe) is supposedly in serious trouble with a lot of debt on the balance sheet and have been slashing prices in the October sales which really caught management off guard.

Barrenjoey ran a broker's call and the feedback was management were shell shocked after the recent price decline + competitors aggressive pricing. They made a good point that the market was pricing the company like its going out of business instead of trading at like 4 x EBIT with $150m in inventory (less than the MC)

I had already acquired my full portfolio % allocation around the $1.35/share so am at that self imposed limit. Normally I'd be trying to catch the falling knife but I think this needs more time to validate if management can make this come good or if it's going to implode like the market seems to think it is.

What do you when the price halves in a week and there's not enough liquidity to sell out of your position?