Go Fashion Q4 Results Review - Demand Outlook Remains Challenging: ICICI Securities

ICICI Securities Report

Go Fashion India Ltd. continues to report double-digit revenue growth (15% YoY in Q4 FY24) driven by exclusive brand outlets retail expansion (+13% YoY). That said, retail expansion was below expectations for FY24 (84 stores versus guidance of 100-110 stores) due to higher store closures while it reduced guidance for FY25 to 120-150 stores (versus 150 earlier).

Same-store sales growth remained flattish (1% YoY) as management highlighted continued weak demand environment and expects mid-single digit SSSG in FY25 (versus ~10% earlier).

Average selling price increased by 4% YoY driven by better mix. Gross margins remained stable (management expects ~50 bps improvement in H1 FY25 on the back of lower-priced inventory), while operating margins were under pressure due to negative operating leverage.

Inventory rationalisation (~22 days) at warehouse level led to material working capital improvement driving significant improvement in operating cash flows. Buy.

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