Australia's City Chic facing challenges in North America- Citi

Torrid Holdings

11/12/2022 19:08

** Citi says US-based apparel retailer Torrid Holdings Inc's
bleak Q3 results  CURV.N  is a reminder of challenges that
Australian peer City Chic Collective Ltd  CCX.AX  faces in North
America
    ** Torrid on Friday posted Q3 FY22 sales of $290.0 mln, down
by 5.3%  urn:newsml:reuters.com:*:nBw3mfmSNa
    ** Brokerage notes the weak trends that Torrid is
experiencing is consistent with City Chic's AGM update that
indicated recent demand in United States has been 'less than
good'
    ** Says while it doesn't see the business as broken due to
less aggressive discounts, it is unclear as to when co's sales
momentum will improve
    ** City sees upsides like fast retail spending growth and
store rollout will boost co's profits and share price, while
downside risks like peer competition and slowdown in retail
spending will impact shares   
    ** Brokerage maintains target price of A$1.04/share and
"neutral" rating for City
    ** Three of twelve analysts rate the stock "buy" or higher,
eight "hold" and one "sell"; their median PT is A$1.14 –
Refinitiv data
    ** Stock down 87.9% this year, as of last close
 (Reporting by Poonam Behura in Bengaluru)
 ((Poonam.Behura@thomsonreuters.com;))