City Chic Collective expects to return to profitability for the last fiscal year amid strong sales growth in the Australia and New Zealand markets, the company said in a trading update.

For the 52 weeks to June 29, underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) is forecast to be in the range of $6 million to $6.5 million, compared to a loss of $8.4 million in the previous year.

“I am pleased with the EBITDA turnaround – returning to profitability is a significant milestone for the business,” said Phil Ryan, CEO and MD.

“We’re making strong inroads in our margin improvements and cost base reductions and are now focused on driving revenue growth that will deliver sustainable profitability.”

Global revenue during the period increased 2.3 per cent to $134.7 million. ANZ sales soared 8.3 per cent to $105.8 million, with comparable store sales up 8.4 per cent. 

Ryan noted that the growth in ANZ was lower than planned, as expected uplift from recent interest rate cuts and improving consumer sentiment has yet to materialise.

Meanwhile, US sales plunged 14.9 per cent to $28.9 million, attributed to ongoing changes in the US foreign trade policy that directly impacted demand. 

“Making these inroads has not been easy, and I believe we are only halfway there on this journey. But with our simplified structure and significantly lower cost base, we are well positioned to take advantage of more favourable market conditions when these return,” Ryan remarked.

The trading update was based on preliminary and unaudited numbers. City Chic will announce its audited FY25 results on August 28.