Vaibhav Global Quarter 4 results, conf call notes:
YoY Revenue’s down by 3%
Q-o-Q Revenue is down 3% with respect to Q3, which typically is the strongest quarter with the holidays season sales.
Retails prices have increased significantly owing to incorporation of budget pay and easy returns in to the pricing of the products…
Gross margin high by 200 bps for the qtr and year due to ASP’s ( average selling price ? )
EBITDA Margin impacted mainly due to lower than expected revenue growth.
introduced new brands and leadership team.
CMD - Sunil Agrawal:
TV revenues flattened out
Gross revenue = 6.6% increased.
Net debt = 16 cr reduced
Customer user experience enhancement is one of the areas we are concentrating on improving.
223,000 new customers have been added.
Repeat purchases = marginally down.
24.5 pieces purchased current year v/s 25.9 pieces purchased last year
Customer retention rate = 45% USA , 53% UK
average revenue per retail customer = INR 31,900 vs 30,700~ which translates to 4% growth.
Forecast for the year ahead:
Gross margins to remain stable and healthy.
Fixed cost might not increase.
lower inventory and Capex visibility for next year = 4 Mil USD.
Volume decreases for last two quarters: Mainly due to return-ability and budget pay. Average Price has increased for the products.
5% returns in last year vs 15% return in this year. 15-16% returns in Q4. No returns are accepted in clearance products.
Web growth - EMI not available. Web sales growth will happen from the second quarter of FY17 ( visibility translates
in Q3 ) onwards due to Hybris platform upgrades( I read it as fixes) which are being worked up on.
Competition in the industry is at $60 price points. our price point on average is at 24 ( web, tv(From $22 to $28) ,etc.). We intend to be on the lower end
Major updates to platform have already been completed.
Negative growth sales is being compensated by positive GROSS sales… this is giving us confidence on volume growth in the coming quarters and year…
-18% to +16% gross sales in the last 45 days has been observed.
We are not launching in India because - the goal is to be profitable with in 3yrs of launch. Inspite of India having phenomenal growth in web purchases, India in Sunil’s opinion is a Maverick market rather than a stable market. Its not the playing field of the company and hence we are away from it for now. Burn rate is high in developing markets. Would prefer to enter a developed market rather than a developing market because of Burn rate. ( this is based on the research already performed by the company.
QVC = $60 , HSN = $18 and VBL = $2 average per household sales wise…
EMI , return-ability and in house brands are the new biz strategy.
Volume de-growth might happen for another quarter or so.
Cost of providing EMI option is about 0.5% of total Net sales
Once net Revenues increases in the next 2-3 quarters, the operating leverage should kick in. For the expenses were a bit higher with the addition of new houses - 10 Million homes.
Please Note: These are my notes from listening to the call. Kindly perform your due diligence before acting on the above.