Campus Activewear Ltd (BOM:543523) Q4 2025 Earnings Call Highlights: Strong Revenue Growth ...

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2 days ago

Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Campus Activewear Ltd (BOM:543523) achieved a 10% year-over-year revenue growth, reaching INR 1,593 crores, driven by higher volumes and strategic distribution expansion.
The company launched over 250 new styles for men, women, and children, enhancing its product offerings and catering to diverse consumer needs.
Gross margin improved by 20 basis points to 52.3%, attributed to procurement and production efficiencies.
The sneaker portfolio experienced a significant growth of 150% compared to the previous year, indicating strong consumer demand.
Campus Activewear Ltd expanded its retail footprint with 30 new stores, increasing the total EPO count to 296 across India.
Despite the premiumization of products, the average selling price (ASP) declined due to a higher mix of open footwear and accessories.
The company faced challenges in liquidating non-BIS inventory, which is expected to impact margins by 20 to 40 basis points in the coming year.
There was a slight decrease in PAT margin from 8.9% to 8.5% due to higher depreciation from impairment of DIP lines.
The online sales volume growth was modest at 6-7%, indicating potential challenges in accelerating this channel.
The company anticipates continued margin pressure due to the liquidation of slow-moving inventory and non-BIS stock.
Warning! GuruFocus has detected 2 Warning Signs with BOM:543523.
Q: Despite an increase in premiumization, why has the average selling price (ASP) declined? A: Unidentified_3 (CFO): The ASP decline is driven by a higher mix of open footwear and accessory sales, such as socks, which have a lower ASP. However, margins have improved by 20 basis points, indicating that the product mix is not diluting overall profitability.
Q: Is the slower growth in online volumes a strategic decision by the company? A: Unidentified_2 (CEO): No, the growth in online volumes is aligned with demand. The company operates each channel strategically to contribute meaningfully to overall revenue. The online channel saw a higher proportion of outright sales, which contributed to ASP increases.
Q: How is the demand scenario and competitive landscape, especially with the BIS inventory cleanup? A: Unidentified_2 (CEO): The non-BIS inventory liquidation has been slower than expected but is under control. Demand has been positive in the north, east, and west regions, with some softness in metros and tier-one cities. The sneaker segment has shown strong growth, contributing to higher ASPs.
Q: What is the impact of the new facility on depreciation, and when will it start affecting financials? A: Unidentified_3 (CFO): The new facility's depreciation started in March for one month and will be fully reflected next year. The investment of around 21 crores will be amortized over 15 years.
Q: How does the company plan to achieve its margin aspirations of 17-19%? A: Unidentified_2 (CEO): The company is trending towards its margin goals through strategic initiatives and cost control. The focus is on maintaining product margins and managing overheads. The impact of non-BIS inventory liquidation is factored into the margin outlook.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.