RALPH LAUREN (NYSE: RL)
American brand Ralph Lauren ended its first quarter with revenues of $1.5 billion, growing 1 per cent in constant currency though foreign currency negatively impacted revenue growth by ~80 basis points. Among Ralph Lauren’s markets, North America decreased by 10 per cent to $632 million in revenue, while Europe grew 8 per cent to $450 million and Asia 13 per cent to $378 million, both on reported basis. The gross profit during the quarter stood at $1.0 billion—gross margin being 69 per cent. The adjusted gross margin was 68.8 per cent, up 80 basis points on reported basis and 130 basis points in constant currency. The net income of $132 million resulted in $1.96 per diluted share on reported basis, and on adjusted basis, it stood at $158 million or $2.34 per diluted share. In Q1 FY22, net income was $123 million ($1.73 per diluted share) on reported basis and $135 million ($1.88 per diluted share) on adjusted basis.
For Q2 FY24, the NYSE-listed company expects revenue to be flat to up slightly to last year in constant currency and foreign currency is expected to benefit sales growth by ~100 basis points.
For full FY24, the company continues to expect revenues to increase approximately low-single digits to last year on a constant currency basis, and, in current exchange rates, the foreign currency is expected to negatively impact revenue growth by ~20 basis points. The operating margin is expected to expand by ~30-50 basis points in constant currency that will be driven by gross margin expansion which is expected to increase ~100 basis points. This is in contrast to the previous outlook of 50-100 basis points expansion, with reduced freight costs, favourable geographic mix and continued growth in AUR more than offsetting product cost inflation.
GOLDWIN INC (TYO: 8111)
Tokyo-listed Goldwin Inc reported its first quarter net sales growth of 9.7 per cent to ¥23,150 million—the highest for a three-month period—in early August reporting. By brands, outdoor brands such as The North Force contributed strongly to overall growth. While the sales dropped in gear-related products, a full-fledged recovery was seen in mountain climbing demand. Additionally, a growing demand trend of adopting high-performance materials for lifestyle wear was also reported.
As a lead time of 6 to 9 months is required for production, the gross profit margin lowered by 2.1 percentage points y-o-y to 50.6 per cent due to a rise in raw material prices for the Spring/Summer collection that was ordered in Autumn of last year. Operating profit was down 0.1 per cent to ¥2,263 million but ordinary profit was 23 per cent up at ¥4,172 million, mainly due to the strong performance of Youngone Outdoor Corporation—an equity-method affiliate in South Korea. The profit attributable to owners of parent was ¥3,347 million—up 28.6 per cent compared to last year—due to the contribution of share of profit of entities accounted for using equity-method.
No changes in its earlier forecasts announced on May 12, 2023 in regard to six months ending September 30, 2023 and full FY24 ending March 31, 2024, were made.
GUNZE (TYO: 3002)
Japan’s Gunze Ltd reported its first quarter sales drop of 0.5 per cent at ¥31,706 million compared to Q1 FY23. On y-o-y comparison, the quarter’s operating profit increased 21 per cent to ¥1,515 million, ordinary profit increased 4.5 per cent to ¥1,640 million, and profit attributable to owners of parent increased 35.4 per cent to ¥1,586 million on a consolidated basis.
By segment, the functional solutions business performed strongly overall, although the stagnant demand in films due to the rising prices and the soaring costs of utilities had an impact on the business. In the medical business, while sales of new products of bio-absorbable medical materials remained brisk, sales of medical lasers struggled. In the apparel business, with the ongoing recovery trend in sales, profitability improved as the company proceeded with the price revision including value addition to its products. The lifestyle creations business performed strongly thanks to the lifting of restrictions on activities.
The company terms its financial year from April 1, 2023 to March 31, 2024, as FY23 and not FY24. Therefore, the outlook for Gunze’s FY23 is now 2.9 per cent increase in net sales to ¥140,000 million, 29 per cent increase in operating profit at ¥7,500 million, 6.6 per cent growth in profit attributable to owners of parent to reach ¥4,800 million, which is expected to result in an EPS of ¥281.55.
V MART RETAIL (NSE: VMART)
The NSE-listed Indian fashion retail company reported a revenue of ₹679 crore in Q1 FY24—growing 15 per cent over the same quarter last year, in an unaudited financial performance. The company’s EBITDA and PAT respectively stood at ₹53 crore and (-) ₹22 crore. The EBITDA margin was 13 per cent of sales that excluded the loss contributed from the newly acquired Limeroad marketplace. The strategic integration of marketplace continued to thrive as the platform’s sales increased 47 per cent on quarterly basis, paving way for a robust omni operations in the coming future. Though no last year’s comparative figures of EBITDA and PAT were reported, a negative PAT pushed company’s performance under moderate.
V-Mart operates 431 stores including 9 new stores opened during the quarter across 272 cities in 26 states and Union Territories; the company’s new warehouse in Palwal, Haryana also became operational during Q1 FY24.
ABFRL (NSE: ABFRL)
A part of Aditya Birla Group, Aditya Birla Fashion and Retail Limited’s consolidated sales grew 11 per cent to ₹3,196 crore in the first quarter of FY24, as reported in early August. The standalone revenue grew 8 per cent y-o-y. While the consolidated sales grew across brands and formats despite unfavourable market conditions, the growth in quarterly revenue was driven by a strong pick-up in new businesses and consistent performance from the established businesses. The EBITDA on consolidated basis stood at ₹353 crore (11 per cent of sales)—29 per cent down from ₹500 crore last year during the same period. Net profits for the quarter were affected by negative operating leverage that resulted from subdued sales for the Pantaloons business as well as continued investments in ABFRL’s TMRW and ethnic businesses.
ABFRL’s store network is now 4,000+ large and is continuously expanding: branded business added 28 stores including 12 stores by ethnic businesses and 3 Pantaloons stores, both on net basis, during the reported quarter. Alongside store expansion, the fashion company is expanding digital footprint as well; e-commerce sales grew 12 per cent y-o-y thanks to strong omnichannel offering.
The company is expecting a rebound in discretionary spend with the onset of the festive season, propelling the company’s growth trajectory further in the second half.
CANTABIL (NSE: CANTABIL)
India’s retail company announced its unaudited standalone financial results in mid-August. The Delhi-based company is in the business of designing, manufacturing, branding and retailing of apparel with a network of 400+ exclusive stores spread across India. The company reported total sales of ₹113 crore in Q1 FY24 against ₹102 crore in Q1 FY23, registering 11 per cent growth. The company’s comprehensive income after tax for the period stood at ₹12.2 crore against ₹14.13 crore of previous year. The EPS dropped from last year’s ₹8.65 to ₹7.52 this year.
Fibre2Fashion News Desk (WE SB)