Credo Brands Marketing Ltd reports a 5% rise in first-quarter revenue as it accelerates its Mufti 2.0 transformation with increased digital investments despite margin squeeze amid subdued consumer spending.
Credo Brands Marketing Ltd said first-quarter revenue rose 5% from a year earlier to about Rs 125 crore, even as weak discretionary spending continued to weigh on consumer demand. Gross profit increased by the same proportion to roughly Rs 77 crore, leaving gross margin unchanged at 62%, but profitability came under pressure as the company stepped up spending on advertising and brand building.
The owner of the Mufti menswear label is in the middle of a wider overhaul it calls Mufti 2.0, with management saying renovated outlets and newly opened stores are beginning to show early signs of traction. The company opened five stores in premium malls and high streets during the quarter and shut seven weaker locations, a move it says should improve the quality of the network and lift productivity over time. It is also shifting more of its marketing budget towards digital channels such as Google and Meta as it tries to strengthen brand visibility and engage shoppers more directly.
That investment came at a cost. Earnings before interest, tax, depreciation and amortisation fell to about Rs 27 crore from Rs 31 crore a year earlier, while profit after tax dropped to Rs 2.3 crore, producing a slim margin of 1.8%. Management said demand softened further from mid-May and described the backdrop as a mix of subdued consumer spending, intense competition and broader uncertainty tied to geopolitical tensions and the global environment.
Kamal Kushlani, managing director, told analysts the transformation will take time and that it is too early to draw firm conclusions from the first signs of progress. He said the company is aiming for mid-single-digit same-store sales growth this year and expects advertising to remain elevated at roughly 8% to 10% of revenue as it tries to retain existing customers while attracting younger buyers. The company also said it wants to trim inventory days from the quarter’s 74, although it stressed that stock levels will continue to vary with the seasonal cycle.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
