Q1 2027 Metro Brands Ltd Earnings Call Transcript
Key Points
- Metro Brands Ltd (BOM:543426) reported a 14% growth in its stand-alone business for Q1 FY27, with a strong recovery in June offsetting softness in April and May.
- Gross margins remained robust at nearly 60%, matching the highest level in the past five quarters, driven by effective cost mitigation and inventory control.
- The company's D2C website and marketplace omni business each grew by approximately 60% year-on-year, highlighting strong digital momentum.
- Clarks brand performed exceptionally well, with successful launches in women's and men's collections, and plans to expand to 700 doors by year-end, indicating significant growth potential.
- Management remains confident in achieving a 15% PAT margin for the full year, supported by stable EBITDA margins of 30% and consistent revenue per square foot despite new store openings.
- April and May sales were dampened by the US-Iran conflict and a shift in wedding dates due to Adhik Maas, leading to a muted start to the quarter.
- Overall e-commerce growth was only 9% due to lumpiness in the SOR 3P business and a conscious decision to reduce discounts, which pulled down the digital segment's performance.
- PAT margins were impacted by increased investments in brand-building marketing, higher occupancy costs, lower treasury income, and investments in talent and technology.
- New store openings were lower than usual (net 9 stores), reflecting market economics and a disciplined approach, which may slow expansion momentum.
- The BIS certification issues continue to pose challenges, particularly for high-end athletic products, with erratic implementation and renewals affecting supply chain and brand launches like FILA.
Ladies and gentlemen, good day, and welcome to the Metro Brands Q1 FY27 earnings conference call hosted by Motilal Oswal Financial Securities. (Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Aditya Bansal from Motilal Oswal Financial Securities. Thank you, and over to you, sir.
Thanks, Sanari. Good afternoon, everyone. On behalf of Motilal Oswal, I welcome you to the 1Q FY27 earnings call of Metro Brands. Joining us today from the management, we have Mr. Rafique Malik, Chairman; Ms. Farah Malik Bhanji, Managing Director; Mr. Nissan Joseph, CEO; Mr. Kaushal Parekh, CFO; Mr. Mohit Dhanjal, COO; and Ms. Alisha Rafique Malik, President, Sports Division, E-commerce and CRM.
Without further delay, let me now hand over the call to the management for their opening remarks. Over to you, Nissan.
Thank you, Aditya. Good afternoon,
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