Aditya Birla Fashion and Retail (ABFRL) on Monday posted a loss of Rs 186.94 crore in the fiscal fourth quarter as against a profit of Rs 43.59 crore in the corresponding quarter last year. “Net profit for the quarter was impacted due to negative operating leverage on the back of sluggish sales. The increase in marketing spends (~1.5 times of LY) and continued investments in TMRW also impacted profitability in the quarter,” the company said in a regulatory filing. ABFRL said that the market saw gradual softening of demand after October and that the value segment was impacted more severely.
It posted revenue from operations at Rs 2,879.73 crore, up 26.1 per cent from Rs 2,282.83 crore in the same quarter last year. The company’s EBITDA stood at Rs 193 crore, down 48 per cent on-year. “Growth in quarterly revenue was propelled by robust retail like-to-like (LTL) sales across businesses, accelerated omnichannel play and network expansion as the company added 500+ stores in the last one year,” it said. ABFRL said that the business growth during the quarter was led by aggressive offline expansion wherein branded business networks added 104 stores on a net basis in Q4 (19 new stores for TASVA and 25 new Pantaloons stores). Currently, the company’s retail presence encompasses 3,546 brand stores, 431 Pantaloons stores, 33,535 multi-brand outlets, and 6,723 shop-in-shops across department stores. Further, it expanded its footprint to a total retail space of 10.8 million sqft in Q4FY23 as against 9.2 million sqft in the same quarter last year.
In terms of digital and omni-channel presence, ABFRL’s e-commerce sales in Q4 grew 77 per cent on-year driven by effective B2B partnerships and brand.com, it said. The e-commerce annual revenue currently stands at more than Rs 1300 crore. It also launched Lifestyle’s SuperApp recently. The company also announced its strategic acquisition of TCNS Clothing Company Ltd, which houses brands like W, Aurelia, Wishful, Folksong and Elleven, in order to build a comprehensive ethnic wear portfolio. ABFRL said, “We closed the quarter with net debt of Rs 1,422 crore primarily on account of continued investments in new growth ventures.”
ABFRL’s segment wise performance
While ABFRL’s Madura Fashion & Lifestyle posted revenue at Rs 2,155.68 crore, Pantaloons’ revenue for the quarter was at Rs 797.81 crore. The company’s lifestyle brands recorded revenue at Rs 1,535 crore on the back of strong 16 per cent retail LTL growth. Brands added 49 stores to its network during the quarter and also achieved solid growth in its small-town network, expanding to 600 stores with profitable operations. Pantaloons posted quarterly sales of Rs 798 crore, up 18 per cent YoY on the back of 13 per cent L2L growth. The inner wear & athleisure segment posted ~10 per cent revenue growth YoY this Q4 despite the continued slowdown in the outerwear segment. Youth Fashion segment consisting of American Eagle and Forever 21 delivered strong performance driven by strategic expansion in newer markets and on the back of brand building initiatives. Super premium brands, comprising of the multi-brand format The Collective and other super-premium brands, delivered 45% YoY revenue growth and strong retail LTL growth of 31 per cent. Reebok has also commenced its distribution expansion by opening new stores, relaunching reebok.in, and initiating department stores and marketplace partnerships. ABFRL’s ethnic businesses grew ~72 per cent on-year this quarter, through strategic market development, leveraging new store openings and impactful marketing initiatives. Its ethnic wear business includes brands like Jaypore, Shantnu Nikhil, Sabyasachi, Tasva, House of Masaba.