Aditya Birla Fashion Q2 Results: Profit Rises But Misses Estimates
Net profit rose 5.77 times over the year earlier to Rs 29.42 crore. That compares with the Rs 79.9-crore estimate by analysts.
Aditya Birla Fashion and Retail Ltd.'s reported an increase in profits and record quarterly sales as footfalls rebounded ahead of the festive season in three months till September. Yet, its bottom line missed estimates.
Net profit of the company, which operates Madura Fashion and Lifestyle and Pantaloons, rose 5.77 times between July and September to Rs 29.42 crore over a year earlier, according to its exchange filing. That compares with the Rs 79.9-crore consensus estimate of analysts tracked by Bloomberg. Sequentially, net profit fell from Rs 94.44 crore.
For the first six months of the ongoing fiscal, the company posted a net profit of Rs 124 crore as against a net loss of Rs 347 crore in H1 FY22.
ABFRL Q2 Results: Key Highlights (YoY)
Revenue rose 50% to Rs 3,074.61 crore, compared with an estimate of Rs 2,901.25 crore. It saw 33% growth over pre-Covid levels.
Operating profit rose 27% to Rs 396.71 crore against a forecast of Rs 456.7 crore.
Margin stood at 12.9% versus 15.3%. Analysts had projected it at 15.7%.
Cost of materials rose 57% to Rs 292.55 crore. However, it fell 13% compared with the previous quarter.
The company closed the quarter with net debt of Rs 243 crore at consolidated level compared to Rs 504 crore at the end of March 2022.
E-commerce sales grew 24% year-on-year across the portfolio.
"Robust like-to-like and consistent e-commerce performance have been key drivers of growth in the quarter," the company said in a statement.
The period also saw a 2.5 times year-on-year jump in marketing spends to Rs 100 crore post a hiatus of more than two years since Covid pandemic, as the company reinvigorated its focus towards brand building and strengthening consumer connect. Ad spends were 60% more than pre-Covid levels.
Despite inflationary pressure, discretionary consumption stayed strong at premium end, the company said in an investor presentation.
"Office, occasion wear etc. were regaining their share in the consumer wardrobe as life gets back to normal," it said.
Segment-wise, Pantaloons achieved highest-ever quarterly revenues to grow 64% year-on-year and 7.3% sequentially to Rs 1,094 crore in the quarter ended September.
E-commerce grew 20% year-on-year on the back of robust festive sales on the app and the website.
Operating margins, according to the company, were ahead of pre-pandemic levels mainly led by sharp markdown reductions and better value realisations.
It also opened 21 Pantaloons stores during the quarter, taking the total network to 396.
Madura Fashion and Lifestyle, which includes the brands Allen Solly, Louis Philippe, Peter England and Van Heusen, among others, saw a revenue growth of 43% over Q2 FY22 and 10.37% over Q1 FY23 to Rs 2,109 crore.
The lifestyle segment's revenues grew 45% year-on-year and 34% over pre-Covid levels to Rs 1,680 crore on the back of industry-leading retail like-to-like growth of 27%.
Ebitda surged 52% year-on-year to Rs 286 crore.
The quarter also marked solid traction for the women’s and kid’s wear business portfolio to achieve the highest-ever quarterly revenue.
The business continued to focus on building the growth engine of small-town stores, with a network of 550 stores across brands.
Other Highlights (YoY)
Inner wear & athleisure segment achieved 27% revenue growth.
The business added 1,400 new trade outlets and 31 retail outlets taking the total to 30,400 trade outlets and 111 stores.
Youth Fashion segment consisting of American Eagle and Forever 21, continued its robust growth of over 50%.
Super premium brands, comprising of the multi-brand format 'The Collective' and other super-premium brands, saw a revenue growth of 35%. E-commerce revenue witnessed 100% growth.
Ethnic businesses grew 90% year-on-year and 9 times over pre-Covid levels, driven by both network expansion and category extensions.
The brand “Sabyasachi” opened its first-ever exclusive brand store in New York. Men’s premium ethnic wear brand Tasva continued its aggressive expansion targeting to end this year with 70 stores.
Driven by a buoyant demand outlook and an encouraging start to the festive season, Aditya Birla Fashion remains optimistic about the overall consumption of fashion products for the rest of the year.
The company added 85 brand stores in Q2, taking the total count to 3,197, and 21 new Pantaloons stores were added, taking the total network to 396.
Shares of Aditya Birla Fashion closed 6.17% lower at Rs 330.65 apiece on Friday after the results were announced, while the benchmark Nifty 50 ended with 0.36% gains on the NSE.