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Tepid performance; revenue grows 3% YoY, while EBITDA declines (in line)

* Revenue at INR18.4b grew 3% YoY (2.5% below), despite a weaker base and improvement in 1QFY26 for peers (+16% YoY for Arvind Fashions).

* Lifestyle brands’ revenue grew 6% YoY, as 15% retail LTL growth was offset by continued store consolidation and weaker performance in the online channel.

* Emerging brands’ revenue declined 2% YoY due to the closure of F21.

* Gross profit rose ~10% YoY to INR11.5b (5% beat) as gross margin expanded ~375bp YoY (+460bp ahead), driven by a better sales channel mix.

* Other expenses spiked 19% YoY (11% ahead), likely due to higher A&P spends (up 280bp YoY), while employee and rental expenses rose 8-9% YoY.

* Reported EBITDA at INR2.6b declined ~2% YoY (in line with our estimate), as EBITDA margin contracted ~75bp YoY (35bp ahead).

* Depreciation increased ~6% YoY (9% below), while interest costs declined ~3% YoY.

* Reported PAT at INR241m rose ~5% YoY, significantly ahead of our estimate of INR167m, largely due to lower depreciation, higher other income (+60% YoY), and lower tax rate (~15% vs. our est. of 25.2%).

Segmental performance

Lifestyle Brands: Strong retail LTL in Lifestyle brands offset by lower online sales

* Revenue at INR15.7b grew 6% YoY (in line with estimates), driven by doubledigit LTL growth across all brands.

* Retail (incl. outlets) grew 12% YoY, driven by strong 15% LFL growth and a double-digit rebound in small towns, offsetting the decline in store count (gross store adds 40+, offset by consolidations).

* Wholesale growth rebounded to ~6% YoY, supported by healthy underlying secondary L2L growth despite a temporary drag from the consolidation of a department store partner.

* Online revenue declined 19% YoY, with growth deliberately moderated to prioritize profitability. ? EBITDA stood at INR2.8b (-1% YoY) and was marginally below our estimate.

* EBITDA margin at 17.8% contracted 125bp, impacted by a 2x jump in A&P spends.

Emerging brands (Reebok, American Eagle, and Van Heusen Innerwear): Growth hurt by the closure of F21; margins expanded as losses halved YoY in Innerwear

* Revenue at INR3.1b declined 2% YoY (7% below), hurt by the closure of Forever21.

* EBITDA stood at INR90m (vs. INR36mn YoY) as VH Innerwear losses halved YoY in 1QFY26.

* American Eagle: Strengthening denim/casual wear positioning; 67 stores and 230+ counters; 2 new stores added in 1Q (3 closures).

* Reebok: Profitable and expanding; 10 new stores in 1Q; footprint of 175+ stores and 950+ offline touchpoints.

* Van Heusen Innerwear: Losses halved YoY; multi-channel growth led by retail; presence in 37,000+ trade outlets & 100+ exclusive stores; added 500+ counters in 1Q.

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