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According to Crisil research, apparel retailer sales growth of 21-23% this fiscal year—an increase of 500 basis points (bps) from pre-pandemic levels—will be aided by robust same-store sales, new store openings, and online channels.
It is anticipated that the operating margin will increase by 175 to 200 basis points YoY to 7.75 to 8 percent. This is supported by stronger private label share absorption of fixed costs, higher prices, and larger scale. However, the analysis finds that higher input costs will only allow operating margins to increase by 50 to 70 basis points over pre-pandemic levels. Additionally, it has been noted that domestic cotton prices increased in April 2020. Due to timely equity raising throughout the pandemic, the apparel retailer’s balance sheets have been carefully handled.
