Vedant Fashions Q1 FY27 Earnings Call: Management Expects Stronger H2 Growth Amid Improving Same-Store Sales

What Happened ?

Vedant Fashions Q1 FY27 Earnings Call focused on management’s confidence in delivering stronger growth during the remainder of FY27 through higher same-store sales, improved customer retention, store optimisation, premiumisation and technology-led operational improvements.

Management also announced the launch of VFL Brahma, an AI-powered internal platform connecting company-wide data to improve operational speed, analytics and decision-making. The company believes investments made during Q1 and Q2 across product development, marketing, supply chain and technology will begin contributing meaningfully from Q3 onwards. 

key details

Strong Financial Performance:

• Revenue from operations increased 7.2% YoY.
• Retail sales grew 3.4%.
• Domestic SSSG improved to 3.8%.
• EBITDA increased 10.8% YoY.
• EBITDA margin remained healthy at 44.6%.
• PAT grew 14.7% YoY to approximately ₹81 crore.
• PAT margin remained strong at 26.7%.

Note:

• Management highlighted that strong profitability continues to be supported by disciplined inventory management, operational efficiency and premium brand positioning.

AI Platform ‘VFL Brahma’ Launched:

• Introduced VFL Brahma, an AI-driven enterprise intelligence platform.
• Connects company-wide operational data into a unified AI system.
• Designed to improve execution speed, efficiency and decision-making.
• Supports merchandising, analytics and operational productivity.

Note:

• Management views AI as an important productivity driver across merchandising, inventory planning and customer engagement.

Same-Store Sales Expected to Improve Further:

• Domestic SSSG stood at 3.8% during Q1 FY27.
• Management’s primary objective is to improve SSSG during the remaining quarters.
• Better product pipeline expected to support stronger customer demand.
• Marketing initiatives launched during Q1 are expected to contribute from Q3 onwards.

Note:

• Management expects higher same-store sales to become the primary driver of FY27 revenue growth before accelerating store expansion. 

Store Rationalisation and Expansion Strategy:

Management explained that store closures are primarily driven by:

• Market relocation to better commercial locations.
• Opening of larger nearby flagship stores.
• Underperforming stores that never achieved expected productivity.

Management also noted:

• Q1 witnessed relatively higher closures because the company strategically completed rationalisation before the weaker Q2 season.
• Net store additions are still expected during FY27.
• Gross store openings are expected to accelerate during H2 FY27.

Note:

• Store closures were described as portfolio optimisation rather than competitive pressure. 

Premium Brands Continue to Outperform:

• Twamev continued outperforming overall company growth.
• Premiumisation remains a strategic priority.
• ASP growth was supported by both pricing and volume.
• Higher ASP growth is expected from the middle of Q2 onwards.

Management believes premium brands will continue contributing a larger share of future growth. 

Mohey Growth Strategy:

Management outlined several initiatives for Mohey:

• Greater focus on non-bridal categories.
• Expansion of stitched suits.
• Growth in sarees.
• Higher contribution from crop-top lehengas.
• Increased digital marketing for newer product categories.

Note:

• Management expects non-bridal categories to become an important long-term growth driver for Mohey. 

Diwas Brand Expansion:

• Positive market response received for Diwas.
• Strong dealer bookings completed for Q2.
• Expanded distribution through:
  • Myntra
  • Amazon
  • Blinkit
  • Zepto
• Enhanced inventory planning for online channels.

Management expressed strong confidence that Diwas will contribute more meaningfully during the festive season. 

Marketing and Customer Engagement:

• “Made For Each Other” campaign featuring Rashmika Mandanna and Vijay Deverakonda crossed 1 billion views.
• Continued celebrity collaborations across brands.
• Dedicated customer retention team established.
• Customer database of nearly 90 lakh continues supporting repeat business.
• New marketing strategy will shift from awareness campaigns to conversion-focused campaigns during H2 FY27.

Note:

• Management expects the campaign’s brand recall benefits to continue over several years rather than only one season.

Competition and Industry Outlook:

Management observed:

• Regional competitors are increasingly closing stores.
• Competitive intensity has started easing across several states.
• Celebration wear remains one of the most difficult retail categories because of inventory risks.
• Many newer competitors have struggled to sustain operations.

Management believes industry consolidation could become favourable for Vedant Fashions over the medium term.

FY27 Outlook:

Management expects:

• Stronger second-half performance.
• Positive net store additions.
• Better same-store sales growth.
• Improved MBO, SIS and e-commerce contribution.
• Continued premiumisation.
• Strong wedding demand from November through March.
• January 2027 expected to benefit from a more favourable wedding calendar compared with the previous year.

Note:

• Management acknowledged that September and October could remain relatively softer because of the festival calendar shift, while expecting November onwards to be significantly stronger. 

Risk Analysis

Summary:

• While management remains optimistic, near-term performance depends on improving consumer demand, successful execution of new store openings and continued momentum in same-store sales growth.

Key Risks:

• Weak discretionary consumer spending.
• Delays in same-store sales acceleration.
• Slower-than-expected festive demand.
• Competitive pricing in wedding apparel.
• Store expansion execution risks.
• Premium product acceptance risk.
• International market weakness, particularly in the UAE and North America.

Worst Case:

• If discretionary spending remains subdued or festive demand weakens, revenue growth and store productivity may remain below management expectations despite ongoing operational initiatives.

Risk Level: Medium

Company Commentary

• Management expects a significantly stronger second half of FY27.
• Product launches, marketing investments and technology initiatives are expected to contribute from Q3.
• Same-store sales improvement remains the top operational priority.
• Premium brands, Diwas and omnichannel initiatives are expected to drive future growth.
• Competitive intensity appears to be easing as weaker market participants exit.
• Long-term confidence remains supported by strong brand positioning, product quality and customer experience.