Vedant Fashions Deliver Lower Numbers With Wedding Calendar Shift
Vedant Fashions reported subdued September Quarter 2023 with revenue and PAT YoY growth falling in double-digits. The company reported revenue from operations of around Rs. 218 crores in Q2FY24 compared to Rs 247 crores in the same period previous year, a fall of 10% YoY. Net profit fell 29% YoY to Rs 49 crore in Q2FY24. Operating margins came in at 42.5% in September Quarter 2023 compared to 46.7% in corresponding quarter previous year. Vendant Fashions houses popular brand Manyavar, leader in branded Indian wedding & celebration wear. Manyavar products range from indo-western, sherwanis, kurtas, jackets and accessories. The company added women’s bridal wear through its Mohey brand in 2015. While both Manyavar and Mohey are in mid-premium price segment, Twamev men & women wear belong to the premium and luxury segment.
Shifting of wedding dates lead to lower revenue in Q2FY24
Vedant Fashions is predominantly a wedding centric business with a special focus on Indian wedding and celebration wear apparels. The company’s business is highly concentrated on the Indian wedding calendar. As wedding dates shift over months or quarters, so do the financial numbers. The second half of the financial year comprising December and March quarter with highest wedding dates deliver strong revenue and profitability numbers for Vedan Fashions. Speaking on low revenue growth in Q2FY24, Vedant Modi, Chief Revenue Officer at Vedant Fashions, said, “This quarter, particularly July month, was an extension to quarter 1 and as expected, we witnessed significantly low weddings in H1 largely as compared to last year, which impacted our performance.” In addition to shifting of wedding dates, slowness in consumer discretionary space also added to low revenue growth in September Quarter 2023. Modi further added that the base was high as last year, H1FY23 was a clean period after COVID without any restrictions.
The management was however optimistic about H2FY24. “With the onset of Navratri, we have noticed good traction and positive trends on a comparable days basis last year”,said Modi. He further said that the company’s franchises are also very positive about H2FY24. The company is seeing good traction at the store level and every parameter from a retail perspective such as footfalls, average bill value, average basket size, everything indicates a good growth in H2FY24. Top 50 partners or franchises contribute 80% of Vedant Fashions revenue.
Store upgradation and renovation undertaken in Q2FY24
According to the management, comparing Q2FY24 performance with normalized pre-COVID of Financial Year ‘20, overall customer sales grew by 58.9% in Q2FY24 versus Q2FY20. The company also witnessed same store sales growth (SSSG) growth of 21.3% in Q2FY24 compared to Q2FY20 excluding the stores under renovation. Speaking on store expansion, Modi said that the company strategically planned to use the sluggish September Quarter 2023 period to expand, upgrade and renovate their existing retail stores. Vedant Fashion successfully rolled out approximately 35,000 square feet of net retail area in Q2FY24, aggregating to 1.2 lakhs of square feet net rollout in the first half of Financial Year ‘24. As of September 2023, Vedant Fashions EBO area stands at 1.59 million square feet, spanning across 669 stores in 260 cities and towns globally. The national EBO footprint tally is at 653 stores spread across 248 cities and towns.
