Concall summary for Q3FY23
1. EBITDA margin – 9M at 12.8%(7.9%), Q3 at 13.5%(10.7%), improved 150 basis points QoQ
2. GM – 9M at 31.5 vs 28.3, Q3 31% vs 29%
3. Exclusive brands – 39 @ 27% of total stores for 9M.
4. 5% growth in ASP in 9MFY23 vs FY22.
5. Repeat customers at ATH @46%
6. 50 stores operational.
7. SSG at 16% for Q3 and 31% for 9M
8. Margin expansion owing to inhouse brands. This expansion is despite the extra 2cr spent on hosting GPHG event. Its sustainable and should be increasing in future. Levers for expansion
a. Operating leverage
b. Exclusive brands because they get the distribution and retail margins
c. Reducing discounts
9. Entered in to exclusive agreement with Bell & Ross, Speake-Marin, Trilobe, and German watch brand Tutima.
10. Bell & Ross was already present in India but decided to work exclusively with Ethos.
11. New brands have a certain gestation period too.
12. Opened new store in Indore and Bangalore.
13. Exports business of Swiss watches reached all time high of 24.8Bn Swiss francs. Main contribution from precious metal watches
14. Export of Swiss watches to India went from 156.8 to 187.6 Mn Swiss francs (19.6% YoY) vs 97Mn in 2020.
15. On time to open 40 stores in next 24 months. Location for next 12 months already signed up.
16. Don’t see any demand issue as of now. (Even Ferrari sees good prospects). Although there were supply chain issue which affected CPO.
17. CPO –
a. 1le digit growth in CPO bcs of supply chain issues. So might miss target of 70cr in FY23.
b. For CPO Q4 should see 70% YoY growth. Next year should see 100% over FY24.
c. Opening large service centre which should be operational in next 4 months.
d. Expect
e. Move to consignment models.
i. Q4FY23 – 30% sales through consignment model
ii. FY24 – 50% sales through consignment model
iii. FY25 – 85% sales through consignment model
iv. This will improve ROCE
v. Expect billing of about 100cr in FY24
18. Stores start breaking in the 1st year and have a 3 year payback period. If store doesn’t start meeting targets within 2-2.5 years then management starts looking at the viability seriously.
19. Store in Indore opened in December is already profitable in January.
20. Will be willing to undercut retailers for existing brands as long as ROC is strong like more than 25%.
21. Inventory days at 156days vs 160 QoQ.
22. Rimowa (from LVMH group) store in Jio Plaza may start from May June. In terms of scale won’t move the scale for maybe 2 years.
23. This year there would be 20 brands which create products designed be ethos. Example – Loius Monet hasi a whole collection exclusively for Ethos, in talks with RADO (which is not event an exclusive brand) for an exclusive timepiece .
| Subscribe To Our Free Newsletter |
