Cettire’s Luxury Dream Turns Sour as U.S. Tariff Hammer Hits Hard

Cettire Ltd (ASX: CTT) has faced a significant blow after the latest developments in U.S. trade policy, sending its share price tumbling by 26% to an all-time low of just 25 cents.

U.S. Tariffs Put Pressure on Cettire’s Business Model

The sharp decline follows a new Executive Order from the United States, ending the de minimis exemption on imported goods from all countries outside the U.S., effective 29 August. Previously, this exemption allowed goods with a dutiable value under US$800 to be imported duty-free, an important factor in Cettire’s operations.

With nearly half of its luxury goods sourced from European nations and sold into the U.S. market, this change significantly impacts Cettire’s cost structure. Products that once benefited from duty-free entry will now face tariffs, eroding the company’s margins and potentially dampening demand from U.S. customers.

Financial Performance Already Under Pressure

This latest setback comes after a challenging 17 months for Cettire. Since reaching a peak of $4.90 per share in March 2024, the stock has experienced a steep decline. A combination of executive share sales, investor exits, and increasingly difficult trading updates have contributed to the prolonged slump.

Recent reports have highlighted falling profits and margin compression, with the company revealing adjusted EBITDA losses in 3Q FY25 and only a small positive EBITDA in its latest trading update. With U.S. tariffs now adding further uncertainty, investors are concerned about the company’s ability to quickly adapt.

The Road Ahead

Cettire has indicated that it is assessing strategies to mitigate the impact of these tariff changes. This could include exploring localisation strategies, adjusting pricing, or diversifying its product sourcing. However, with U.S. sales making up a large portion of its revenues, these adjustments may take time to bear fruit.

For shareholders, the near-term outlook remains volatile. Market confidence will likely depend on whether Cettire can stabilise earnings and successfully navigate the complex international trade environment.

Pristine Gaze Perspective

While Cettire’s fall has been dramatic, it highlights the risks of relying heavily on international markets and favourable trade conditions. Investors should carefully assess the resilience of a company’s business model before investing, particularly when external regulatory changes can disrupt revenue streams so quickly.

Note: This article is for informational purposes only and reflects the views of Pristine Gaze. It does not constitute financial advice. Please conduct your own research or consult a licensed financial advisor before making investment decisions.

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