The lifestyle retail store chain also saw an addition of 13 stores in Q3FY19, taking the total store count to 89 stores.
Future Lifestyle Fashions (FLFL) is poised to clock Rs 1,000-crores sales in the footwear business in the financial year 2019, as the company added Lee Cooper’s footwear business to its retail group in April last year, analysts from Edelweiss research firm said. After relatively slower growth in the first half of FY19, FLFL recorded revenue and profit numbers above expectations in Q3FY19 results on Saturday due to an increase in store expansion and growth in its private brands.
The overall same-store sales growth (SSSG) was 15% year-on-year, helped by the festive shift towards the months of October and December in 2018 and higher campaigns in Brand Factory, a Jefferies report stated. The activation schemes like free shopping weekend, where customers were offered to pay Rs 2,000 on the purchase of items worth Rs 5000, gave a robust SSSG growth of 20.8% y-o-y during the third quarter of this financial year as compared to 6.6% during the same quarter last year.
The lifestyle retail store chain also saw an addition of 13 stores in Q3FY19, taking the total store count to 89 stores. On the other hand, analysts state that the company is cautious in terms of store expansion with Central and added just one store in Q3FY19, reaching a total of 44 stores. Central saw SSSG of 11.3% y-o-y in the quarter under review on a base of 11.8% in Q3FY18.
“We are planning to open five Central stores and our focus will be on profitability and steady SSSG,” the board of management said in investors’ presentation. The company increased its retail footprint by 0.4 million sqft, to 6.6 million sqft in Q3FY19. Over the next five years, the retailer has plans to double the stores of Brand Factory with more than 30 stores addition every year.
Future group’s fashion and lifestyle business arm reported a revenue increase of 38% y-o-y in Q3FY19, with Rs 1,692 crore of revenue as compared to Rs 1,226 crore in the third quarter of the previous year. The standalone earning before interest, tax, depreciation, and amortization (Ebitda) along with earnings from the private label Lee Cooper went up by around 41.8% y-o-y, from Rs 126 crore in Q3FY18 to Rs 179 crore in Q3FY18. The standalone (plus Lee Cooper) profit after tax (PAT) saw an increase of 51.6% y-o-y, at Rs 67 crore in Q3 of the current financial year as against Rs 44 crore in Q3FY18.
The private brands at FLFL also saw strong growth led by Lee Cooper, which saw a growth of 53% y-o-y, Scullers, up by 37.5% y-o-y, Indigo Nations with an increase of 40% y-o-y, John Millers by 19.5% y-o-y, Bare Casuals by 70% y-o-y, All by 28% y-o-y and Jealous 21 grew by 33% y-o-y. This growth was seen due to more focus on such power brands and price reduction to increase volume sales. While the gross margin declined 210 basis points y-o-y to 33.9% on a shift of revenue mix, Ebitda margin increased 40 bps y-o-y to 11 quarter high of 9.8%.