We believe ladies fashion business City Chic (CCX) is a top quality retailer that has simply hit a rough patch and this feels like one which the market may have got wrong medium term. The half year earnings delivered in February weren’t good, the question is it creating an opportunity – sales revenue of $178mn was up 49%, NPAT was down 6% and operating cash flow was negative $19.4mn flowing through to no dividend. The stock plunged on these numbers but the risk / reward looks good around $3.35 – potentially one for our Emerging Companies Portfolio.
MM likes CCX under $3.50
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