Highlights-

• The net sales for quarter ended June 2015 has grown by 8% to Rs 354.40 crore while net profit has declined by 6% to Rs 25.10 crore.

• Hypermarket grew by 50%. Carlton, Skybag and Caprese grew by 30%

• Volume has grown by 4%, while rest is price led growth.

• CSD sales declined to competition from low price player Safari. The company is working on improving sales in CSD.

• International business declined due to weak economy in UK, Europe and Middle East. The mgmt said that the growth in international market looks difficult as it is not such a known brand there.

• COGS saw rise QoQ due to brand mix and decline in international revenue which has good margin.

• The employee cost will remain high due to increase in numbers of promoters to promote its brands & increase sales and also due to increment given to promoters. The mgmt said that instead of declining its price and selling its brands, it will prefer to hire more promoters and increase ad-spend to increase its sales.

• Ad expense up by 36% to Rs 24 crore due to spend on VIP, Skybag and Caprese brands.

• Increase in ad-spend and employee cost impacted the OPM.

• VIP sales are flat while Alpha is declining as brand.

• Industry is 30% hard luggage and 70% soft luggage.

• E-commerce is growing very fast on smaller base. The mgmt said that it want to grow e-commerce business without channel conflicts. Today, not entire range is available on e-commerce.

• The company will no create any separate brand for e-commerce.

• The company will launch bagpack under VIP brand.

• The company got bulk order from Haj committee. The products will be delivered in Q2 and revenue will be recognized in Q3. Since it is bulk order, it will impact the margin.

• The mgmt said that its raw material prices have not fallen down despite fall in crude oil prices.

• Bangladesh was another profitable quarter for the company.

• The company has seen double digit growth in its own stores.