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Vedant Fashions Limited Q1 FY25 Earnings Conference Call Summary
Key Financial Results • Quarter Ending: June 30, 2024 • Revenue: INR 240 crores • Profit After Tax: INR 62.5 crores • Impact: Performance affected by fewer wedding dates, resembling a non-wedding quarter.
Management Insights • Optimism: Anticipation of normalization with upcoming wedding and festive seasons. • Retail Adjustments: Store closures in Tier 3 cities; plans for expansion later in the year. • Transcript Availability: Accessible on the company's website.
Q&A Highlights • Wedding Dates: • Gaurav Jogani inquired about Q2 wedding dates; Modi expressed confidence in July's performance. • Sameer Gupta noted a favorable distribution of wedding dates this year.
• Advertising Expenses: • Gupta highlighted a decline; Modi explained a strategic focus on core marketing.
• Consumer Behavior: • Ayush from Shravas Capital noted recovery in dealer networks and strong performance of new stores.
• Store Closures: • 23 stores closed, primarily smaller ones; typical for retail dynamics. • Varun Singh confirmed a net closure of 26-27 stores.
• Mohey Brand Performance: • Positive consumer response; healthy retail KPIs reported.
• Market Strategy: • Focus on towns with populations over 100,000; strategic exits from five cities.
• Competition: • Internal study showed strong performance near competitors; impacts attributed to wedding season dynamics.
Future Outlook • Store Openings: Healthy pipeline for the second half of the year; focus on larger stores in better locations. • Inventory Management: Dead stock levels remain negligible. • Pricing Strategy: Slight increase in average selling prices due to brand growth. • Advertising Strategy: Maintaining 5% to 6% annual spend; new agency McCann engaged for strategic marketing.
Conclusion • Management expressed gratitude for participation and maintained a positive outlook for the upcoming months, emphasizing commitment to productivity and growth.
Vedant Fashions Limited Q4 FY24 Earnings Conference Call Summary
Submission Details • Date of submission: May 7, 2024 • Conference call date: May 1, 2024 • Participants: Chief Revenue Officer Vedant Modi and Chief Financial Officer Rahul Murarka
Financial Performance Highlights • Q4 FY24 Revenue: INR 363 crores (6.3% growth) • Gross Margin: 67.1% • Profit After Tax (PAT) Margin: 31.9% • Full Fiscal Year Revenue: INR 1,368 crores • Full Fiscal Year PAT: INR 414 crores (30.3% margin) • Contributing Factors: Retail expansion, marketing campaigns, diverse product offerings; challenges included lower wedding volumes and muted consumer sentiment.
Key Inquiries and Responses • Receivables Increase: From 130 to 150 days due to new store area addition; working capital days increased slightly from 83 to 88 days. • Rent-Related Expenses: Over 80% of new stores are leased, with 65% of revenue from rented locations. • Demand Environment: Decline in weddings and weaker consumer sentiment noted; optimism for growth in the second half of the fiscal year. • Mohey Store Performance: Positive early metrics and consumer feedback reported.
Other Income and Store Productivity • Increase in Other Income: Attributed to higher finance income; no exceptional income from store sales or lease cancellations. • New Store Productivity: New larger stores operating at 50% productivity; expected to mature over two years. • Store Openings: Strategic consolidation of older stores; plans for more openings in the latter part of the fiscal year.
Brand Performance and Market Position • Twamev Brand: Positive consumer feedback; focus on prime locations. • Unorganized Market: No significant market share gain for unorganized players reported. • Project Manthan: Excitement expressed for scaling up the initiative.
Store Rollout and Marketing • FY'24 Store Openings: Net rollout of 27 stores; strategy focused on square footage rather than number of stores. • Advertising Spend: 5.6% of revenue; job charges at 5-5.1%. • Long-term Marketing Strategies: Emphasis on promoting Indian wear for weddings.
Growth Expectations and Consumer Sentiment • FY'25 Growth Outlook: Cautious for Q1 due to fewer wedding days; optimism for Q2 and beyond. • Impact of Weak Consumer Sentiment: Historical precedent for recovery after downturns noted; weddings in India are inevitable.
Competition and Market Position • Competition Concerns: Challenges primarily from lower wedding numbers and weak consumer sentiment rather than direct competition. • Future Category Expansions: Plans for wedding-related categories and accessories; announcements expected in upcoming quarters.
Conclusion • Closing Remarks: Vedant Modi thanked participants and expressed anticipation for future interactions.
Vedant Fashions Limited Q3 FY2024 Earnings Conference Call Summary
Earnings Highlights • Date of Call: January 29, 2024 • Revenue Growth: 7.5% to approximately ₹475 crores in Q3 • Gross Margin: 67.8% • Profit After Tax (PAT) Margin: 33.2% • Customer Sales Growth: 11.1% • Challenges: Lower wedding volumes and economic slowdown
Q&A Session Insights • Sales Growth Trends: • Customer sales growth at 2.7% • Negative same-store sales (SSS) average of -7% over the past four quarters • Growth driven by wedding attendee segment and marketing efforts
• Market Share Concerns: • Loss to unorganized players due to fewer wedding days and economic slowdown, especially in tier two and three cities
• Seasonal Performance: • Weak sales during the shradh period; strong festive shopping performance • Cautious optimism for upcoming quarter despite soft consumer sentiment
Consumer Sentiment and Market Dynamics • Current Sentiment: Mixed factors affecting performance; optimism for March • Gross Margin Contraction: Attributed to product mix variations; acceptable margins above 65% • Store Expansion Plans: 15-16% growth in retail footprint for FY2025; average new store size around 3,000 to 3,200 square feet
Regional Performance and Brand Updates • Southern Market: Largest market for the company with tailored merchandising • Twamev Brand: Initial store performance satisfactory; plans for future openings with a focus on larger store sizes
Competitive Landscape • Tier Two Market Pressures: Increased competition from unorganized players; focus on data-driven merchandising • Employee Costs: 10% year-over-year decrease in director remuneration; regular employee expenses up over 20%
Future Outlook • Cash Reserves and Growth: Long-term focus on apparel; plans for dividends and investments in new segments • E-commerce Growth: Traditional retail remains significant for wedding apparel purchases; cultural importance of owning wedding attire
Conclusion • Store Openings Impact: Minimal effect on overall business performance; focus on weddings and consumer sentiment as key demand indicators • Closing Remarks: Gratitude expressed to analysts for participation in the call.
Conference Call Overview • Date: November 6, 2023 • Key Executives: Vedant Modi (Chief Revenue Officer), Rahul Murarka (Chief Financial Officer) • Focus: Q2 FY24 earnings and company performance
Network Expansion • Added 35,000 sq. ft. of retail space in Q2, totaling 1.2 lakh sq. ft. in H1 FY24. • Plans to renovate 100,000 sq. ft. of existing retail space. • Marketing strategies implemented to enhance brand visibility.
Financial Performance • H1 FY24 Revenue: Approximately Rs. 530 crore, impacted by fewer wedding dates. • Revenue growth of about 58% compared to H1 FY20. • Q2 FY24 Revenue: Around Rs. 218 crore, 67% increase from Q2 FY20. • Gross margins: 66.6%; PAT margin: 26.5% (Rs. 141 crore).
Optimism for Future Performance • Anticipation of improved performance in H2 FY24 due to increased wedding dates and festive seasons. • Positive retail traction observed in late October.
Brand Performance • Strong consumer feedback and sales growth for Twamev and Mohey brands. • Plans to expand exclusive brand outlets (EBOs) for both brands.
Sales Contribution Insights • H1 typically accounts for 35%-38% of annual sales; last year was an outlier at 42%. • Focus on diversifying offerings beyond weddings to boost H1 performance.
Online Sales Growth • Significant growth in online sales since the launch of Manyavar.com. • Average selling prices (ASPs) have risen due to enhanced product offerings.
Market Share and Competition • Sales slowdown attributed to shifts in wedding dates and consumer spending, not increased competition. • Advanced inventory management system in place to optimize product design and replenishment.
Trendsetting and Merchandising • Large creative design team testing global trends for the Indian market. • Focus on quick replenishment of popular items to ensure customer satisfaction.
Franchisee Relationships • Strong relationships with franchisees, maintaining a consistent incentive model. • Transparent communication with long-term partners.
Cautious Expansion Strategy • Cautious approach to expanding Manyavar Mohey brand; piloting new stores before significant expansion. • No price cuts; ASP remains strong.
Conclusion • Anticipation for strong second half of FY24 driven by festive demand. • Focus on product innovations and strategic growth for Mohey and Twamev brands.
Vedant Fashions Limited Q1 FY24 Earnings Conference Call Summary
Overview • Date of Call: July 27, 2023 • Transcript submitted on: August 1, 2023 • Revenue for Q1 FY24: INR 312 crores • Comparison: 52% growth from Q1 FY20 • Gross Margin: 66.8% • Profit After Tax (PAT) Margin: 29.5% • Anticipated stronger sales in the second half due to wedding and festive seasons.
Key Discussions
Impact of Wedding Dates
• Fewer wedding dates compared to the previous year affected revenue. • Historical data suggests a recovery in the second half of the year.
Brand Performance
• Twamev Brand: • Targeting higher-income clientele. • Focus on high-end store experiences and targeted marketing. • Mohey Brand: • Improved demand and conversion rates. • Launching first exclusive brand outlet (EBO) in early Q3.
Sales and Market Trends
• Concerns raised about a 22% decline in same-store sales. • Decline attributed to industry-wide trends, not just competition. • Wedding-related purchases are often planned in advance, mitigating current consumer sentiment impacts.
Consumer Behavior Insights
• Demand in the wedding sector is often deferred rather than destroyed. • No significant change in consumer behavior; growth in average basket size noted.
Retail Strategy
• Data-driven approach for opening flagship and super flagship stores. • New stores are franchisee-owned, with the company covering lease costs. • Focus on maintaining profitability amid higher fixed costs and inventory levels.
Future Outlook
• Significant increase in wedding dates expected in the second half of the year. • Management expressed cautious optimism based on historical trends and market data.
Conclusion • The management team expressed gratitude for support and optimism for future performance, emphasizing strategic growth amidst current market challenges.
Vedant Fashions Limited Q4 FY23 Earnings Conference Call Summary
Submission and Compliance • Transcript submitted to National Stock Exchange of India and BSE Limited on May 5, 2023. • Conference call held on May 2, 2023, featuring CMO Vedant Modi and CFO Rahul Murarka.
Financial Performance Highlights • Q4 FY23 Results: • Revenue: INR 342 crores (15.3% increase from Q4 FY22) • Gross Margin: 66% • EBITDA: INR 171 crores (17% increase) • Profit After Tax (PAT): INR 109 crores (23% growth)
• Full Fiscal Year FY23 Results: • Total Revenue: INR 1,355 crores (30% increase from FY22) • Gross Margin: 67.4% • PAT: INR 429 crores (36.3% growth) • Return on Capital Employed (ROCE): 95.3% • Cash Conversion Ratio: 83%
Retail Expansion and Marketing • Opened 54 new exclusive brand outlets (EBOs) during FY23. • Successful marketing campaigns targeting wedding audiences featuring celebrities.
Competition and Market Position • Stores outperforming state average in same-store sales growth (SSSG) despite organized retail competition. • Strong brand recognition for Manyavar with 98% awareness.
Brand Performance and Digital Strategy • Positive growth for Mohey and Twamev brands; plans for new flagship stores. • Phase 1 of digital strategy launched, improving website performance; Phase 2 to enhance shopping experience.
Financial Metrics and Future Outlook • Confidence in achieving high single-digit SSSG moving forward. • EBITDA margins expected to maintain around 30% in the short term. • International stores contribute 1-2% to revenue with a 26% CAGR since pre-COVID.
Store Performance and Marketing Expenses • Smaller stores remain profitable despite potential slight declines due to new flagship stores. • Marketing expenses consistent as a percentage of revenue year-over-year.
Closing Remarks • Vedant Modi and Rahul Murarka expressed gratitude to analysts and participants. • Anticipation for the next quarter's call.
Vedant Fashions Limited Q3 FY 2023 Earnings Call Summary
Key Executives • Chief Marketing Officer: Vedant Modi • Chief Financial Officer: Rahul Murarka
Company Performance Highlights • Sales Growth: • 29.6% increase in customer sales compared to Q3 FY 2020. • 47.6% increase over the nine months of FY 2020. • New Outlets: • Opened 14 new exclusive brand outlets. • Marketing Initiatives: • Campaign featuring actor Ranveer Singh to promote Indian wedding attire.
Financial Overview • Nine Months Ending December 31, 2022: • Revenue: INR 1,013 crores (36% increase YoY). • Gross Margin: 67.8%. • EBITDA: INR 507 crores (35% increase). • Profit Before Tax (PBT): INR 430 crores (42% increase). • Profit After Tax (PAT): INR 320 crores (42% increase), PAT margin of 31.6%. • Q3 FY '23: • Revenue: INR 441 crores (15% increase YoY). • EBITDA: INR 226 crores (14% increase). • PAT: INR 150 crores (18% increase). • Cash conversion ratio: Exceeding 100%.
Market Insights • Wedding Dates Impact: • Anticipated recovery in January with a tripling of wedding dates in Q4. • Discretionary Spending: • Business performance influenced by wedding dates; positive trends in average selling price and conversion rates.
Buyer Growth and Sales Conversion • Buyer Growth: • 29% increase compared to pre-COVID levels, mainly in non-wedding segments. • Sales Conversion: • Primary to secondary sales conversion at 75%. • Long-term same-store sales growth target: Good single-digit growth.
Mohey Brand Update • Performance: • Strong same-store sales growth exceeding company average. • Focus on improving inventory turnover and backend processes. • Positioning: • Mohey to be positioned as an aspirational yet value-for-money brand targeting women. • Average lehenga price around INR 22,000.
Retail Expansion Plans • Growth Target: • 16% CAGR over the next 2-3 years, focusing on square footage. • Expansion into new Tier 3 cities and larger stores in high-productivity areas.
Closing Remarks • Positive Outlook: • Recovery noted in January despite shifts in wedding dates. • Optimism about aligning business with management expectations. • Gratitude: • Thanks to participants and anticipation for the next quarter.