How City Chic’s ANZ Surge and US Resilience Are Shaping FY26
City Chic Collective reports solid revenue growth driven by a 10% increase in ANZ sales and a resilient, profitable US business despite tariff challenges.
- Total revenue up 2.6% for 18 weeks to 2 November 2025
- ANZ business revenue grows 10% year-on-year
- US revenue declines 21.1% but outperforms expectations
- Gross margins stable and costs well controlled
- Positive operating cash flow forecast for FY26
Strong Momentum in ANZ Market
City Chic Collective has delivered a promising trading update for the first 18 weeks of fiscal 2026, with total revenue rising 2.6% compared to the prior corresponding period. This growth was largely driven by a robust 10% increase in revenue from its Australia and New Zealand (ANZ) operations. CEO Phil Ryan highlighted the success of the company’s strategic pivot towards higher-value customers and enhanced product quality, which has resonated well with shoppers and supported margin stability.
US Business Navigates Tariff Challenges
While the US segment experienced a 21.1% revenue decline, it still outperformed management’s conservative expectations amid ongoing tariff uncertainties. The US business remains profitable following a restructuring that shifted costs to a more variable base. Direct-to-consumer channels, including the company’s website and marketplaces, showed resilience with sales down just 9.8%, better than planned. However, wholesale channels faced more significant headwinds, reflecting the impact of reduced new product launches and a tough prior-year comparison.
Inventory and Cash Flow Management
City Chic has successfully reduced inventory levels to $26.2 million while maintaining sufficient stock to capitalize on key trading periods such as Black Friday and Christmas in ANZ. The company’s disciplined approach to working capital and cost control has positioned it well to achieve positive operating cash flow for FY26. With a healthy cash balance of $9.5 million and an undrawn $5 million debt facility, City Chic expects to repay its debt facility within the half-year, underscoring financial prudence.
Retail Expansion and Product Strategy
During the period, City Chic opened two new stores in Queensland and Victoria, featuring a refreshed store concept focused on improved layout and customer experience. This expansion reflects confidence in the brand’s appeal and the effectiveness of its omni-channel strategy. The company has also overhauled its product development process, shifting away from lower-price segments toward higher-quality, full-price merchandise, which is already showing encouraging sell-through results.
Looking Ahead
Management remains cautiously optimistic about the US market outlook, with plans underway for next summer’s inventory purchases. The company continues to monitor trade conditions closely, encouraged by signs of increasing stability and potential improvements in trade agreements. The next eight weeks will be critical for City Chic’s half-year performance, with the company well positioned to deliver on its strategic and financial objectives.
Bottom Line?
City Chic’s disciplined execution and strategic focus set the stage for a potentially strong FY26 finish amid ongoing global uncertainties.
Questions in the middle?
- How will City Chic’s US business navigate ongoing tariff and trade volatility in the coming months?
- Can the company sustain ANZ’s strong revenue growth while expanding its store footprint?
- What impact will the shift to higher-quality, full-price products have on long-term margins and customer loyalty?
