CAMPUS - Campus Activewear Limited Share Price

The management of Campus Activewear has provided an optimistic outlook following a strong performance in Q4 and FY26. Key figures indicate a year-over-year (YOY) revenue growth of 12.3%, driven by an 18.9% increase in the online channel and a 5.5% growth in distribution sales. The average selling price (ASP) rose by 7% YOY to INR 683, mainly due to high demand for their sneaker range, reinforcing the brand's strong market position.

Management highlighted that their sneaker portfolio experienced a 100% growth YOY, contributing positively to consumer preference and overall sales. In FY26, nearly 250 new SKUs were launched, showcasing their innovation strategy.

Looking toward the future, production capacities are expected to increase, with monthly output projected to double by the end of FY27, potentially supporting a further 60-70% growth in the sneaker segment. The company is also doubling down on its commitment to profitability over retail expansion, planning to maintain a stable network of 300 exclusive brand outlets while judiciously managing working capital.

Management emphasized their strategic focus on brand positioning, exemplified by a recent logo refresh aimed at aligning with evolving consumer preferences. They expressed confidence in their ability to navigate inflationary pressures through strategic price hikes and cost management.

The return on equity stands at 18.1%, with return on capital employed at 22.4%, reflecting strong financial health. Over the upcoming period, management will prioritize innovation, agility, and consumer engagement as core strategies to fortify their market leadership, despite the competitive landscape. Overall, they remain optimistic about sustaining growth and enhancing their brand presence in the footwear industry.

Summary of Q&A from Campus Activewear Limited Q4 FY26 Earnings Call

Question 1: "Could you just explain what happened? Why was there a shift between INR 1,000 to INR 1,500?" Answer: The price mentioned is our average selling price. The movement reflects corrections in MRP following the GST change, where the 12% GST got revised to 5%, leading many shoes previously above INR 1,000 to now be below INR 1,000.

Question 2: "Can you just throw a little more light on what has helped with the improvement in online mix?" Answer: We've focused on our marketplace operations, enhancing partnerships with platforms like Flipkart and Amazon. This growth is attributed to improvements in revenue mix and aggressive growth on these platforms, alongside our own brand site.

Question 3: "What was the kind of price hike that we have taken?" Answer: We have taken proportional price hikes across our range to mitigate macro inflationary pressures. We're also implementing cost-saving initiatives internally, but these hikes are sufficient to safeguard our margins.

Question 4: "Shall those recent price hikes suffice to cover the inflation, or might you need to take more?" Answer: The recent increases adequately cover inflationary impacts. We believe we've seen the peak of raw material impact, with improvements expected in the latter half of the year.

Question 5: "Can you provide insights on the increase in lease-related costs?" Answer: The increase is due to accounting for our Pantnagar facility. We have a 71-year lease; hence, payments show as lease liability. Comparatively, if you strip out INR 65.4 crore, the normal rental cost is more aligned with previous periods.

Question 6: "What do you expect the inventory days will be going ahead?" Answer: The increase in inventory days is to ensure we maintain necessary levels for growth. We've prioritized this correction to manage growth effectively, and we believe this is the correct level moving forward.

Question 7: "What drove the decision for the brand refresh?" Answer: The refresh aligns with our evolution and is based on extensive consumer feedback. It represents our transition to a more design-led identity, affirming the brand's alignment with youth culture and aspirations.

Question 8: "What cost-saving areas are you considering?" Answer: While we aim to maintain marketing budgets, which we believe are crucial for growth, we'll focus on operational efficiencies and strategic investments, preserving the integrity of our brand and marketing efforts.

Question 9: "What's the growth seen in the sneaker portfolio?" Answer: Our sneakers portfolio has seen over 100% year-on-year growth, driven by product development and market acceptance. We plan to sustain this momentum and maintain focus on premiumization.

Question 10: "Could you share margin guidance for FY27?" Answer: We don't provide specific margin guidance, but we aim to stay within our previously communicated range of 17% to 19%.

This summary captures key questions and answers, maintaining the integrity of the information shared during the conference call.