Aditya Birla Fashion and Aditya Birla Fashion and Retail (ABFRL) reported a weak performance in Q1FY24, with Ebitda declining by 38% y-o-y, resulting in a net loss of Rs 1.6 billion, which was more than estimated. The company’s Lifestyle and Pantaloons segments suffered due to a decline in same-store sales growth (SSSG) of -3% and -8% y-o-y, respectively. Additionally, ABFRL faced significant losses of Rs 700 million in its new ventures, namely Ethnic, TMRW, and others.
The management attributed the weak performance to adverse market conditions affecting both value and premium categories. However, they expressed hope for a potential recovery during the festive season. To mitigate the impact of the challenging demand environment and the losses from new ventures, ABFRL plans to reduce the pace of new store openings, primarily in Pantaloons.
In the first quarter of FY24, ABFRL’s consolidated revenue reached Rs 32 billion, representing an 11.2% y-o-y growth, meeting expectations. After adjusting for TMRW’s sales (Rs 730 million), Aditya Birla’s consolidated sales rose 9% y-o-y. The Ebitda stood at Rs 2.9 billion. The Ebitda decline was due to lower retail throughput, early EOSS (end of season sales), and losses within the subsidiaries (TMRW, Ethnic). The market environment remained weak with both value and premium categories seeing weak demand trends. However, the categories are likely to recover due to the festive season and passing of lower RM prices to customers.