Bata India’s fourth quarter results show focus on retail optimization and expansion

Bata India’s fourth quarter results show focus on retail optimization and expansion

By Retail4Growth Office | May 26, 2022

The footwear major announced that the continued focus on key areas of franchise expansion and MBOs, consumer-friendly communication, portfolio insecurity, digital footprint expansion and business expansion in Tier 3-5 cities led to increased footfall at outlets, with revenue for the quarter remaining in line with pre-pandemic levels for a second consecutive quarter.

Footwear giant Bata India Limited has announced its financial results for the quarter ended March 31, 2022, which show that the continued focus on key areas of franchise expansion and MBOs, consumer-friendly communication, the casualization of the wallet and the expansion of the digital footprint have led to an increase in footfall. in outlets, as well as significant growth driven by e-commerce platforms and expansion into Tier 3-5 cities. pandemic for a second consecutive quarter. This despite Omicron-related disruptions in the first part of the quarter, which were offset in the latter part of the quarter where the company said it saw a significant rebound in growth.

The company announced that despite the Omicron disruptions, operating revenue for the quarter stood at Rs. 6652 million and pre-tax profit was Rs. 844 million compared to pre-tax profit of Rs. 403 million in the quarter ended March 31, 2021, supported by improving consumer sentiment in the latter part of the quarter and showing a strong and sustained recovery. For the financial year 2021-22, the company recorded revenue of Rs. 23,877 million and a pre-tax profit of Rs. 1,368 million against a revenue for the financial year 2020-21 of Rs 17,073 million and a loss pre-tax of Rs. 1177 million

Continuous focus on cost optimization throughout the value chain

The company continued to optimize its retail network and seek cost savings in rentals and operations, manufacturing and improving the efficiency of its value chain. All cost-focused initiatives, which have been implemented across multiple workflows, continue to gain momentum and show impact quarter over quarter, the company said.

Ashwani Windlass, Chairman, commented: “Bata India has delivered strong performance and is on a good trajectory. Given its focus on new collections, expansion across all channels and omnichannel in particular, Bata India is well positioned for the future. Its new business model and direction is reflected in the rapid recovery of business to pre-pandemic levels and continued growth. Our free cash from operations and operating leverage remain at a significant level, providing us with the financial flexibility to grow our business organically and/or inorganically, as appropriate.

Gunjan Shah, MD and CEO – Bata India Limited, said: “Over the past two quarters, we have witnessed a significant recovery in demand amid improved consumer sentiment and better understanding of the pandemic, the availability of vaccines and a more rapid easing of restrictions. We continued to expand our reach through new franchise stores and multi-brand outlets. We opened 22 new franchise stores bringing the total number to more than 300, expanded availability through a distribution channel that continued to expand to more than 1,000 cities. We have improved our portfolio in the casual and fashion footwear section in all categories. Sneakers led the recovery in growth in the quarter, while formal and fashion also recovered significantly. We continued to increase our marketing investments with campaigns like Unlimited Sneaker, Neo casuals for Neo Leaders and It’s Got to be Bata, 24×7 Casual Collection which strengthened our customer connection for our brand.

“At the same time, we continued to focus on cost reduction measures across our network, controlling discretionary spending, improving productivity and premiumization in the face of volatile inflation. These measures laid the foundations that will help us capture emerging consumer demand effectively.With the scaling of the above expansion/efficiency levers and the rebound in consumer sentiment, we expect momentum to continue towards the rate of pre-pandemic growth in the current quarter, also as seen in the quarter to date at 11% ahead of pre-covid levels, with gross margins supporting at levels of 58% Innovation through building agile products, scaling digital channels, expanding into Tier 3-5 cities and improving productivity will continue to be a priority, along with investments Dan s our brands and our stores,” he added.

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