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    Campus Activewear Q1 FY27 earnings call

    CAMPUS
    Consumer Durables·6 Aug 2026
    Management Summary

    Campus Activewear Limited reported a strong start to FY27 with robust revenue and volume growth, alongside healthy PAT growth and stable EBITDA margins, despite facing macroeconomic headwinds and temporary ASP suppressions. The company's strategic initiatives, including the launch of 'Elan' and expansion of its distribution network, are expected to drive future growth and premiumization.

    Highlights

    5

    • Delivered 12.2% revenue growth in Q1 FY27.

    • Achieved 11.7% volume growth in Q1 FY27.

    • Reported 17.7% growth in profit after tax.

    • Maintained stable EBITDA margins at 15.9%.

    • School shoes business saw an exceptional recovery with nearly 50% Y-o-Y revenue growth.

    Concerns

    4

    • Temporary factors suppressed ASP by approximately 4.5-5% (Walmart accounting change and school shoes product mix).

    • Faced geopolitical uncertainties, volatility across global supply chains, and inflationary pressures on raw materials.

    • Absorbed a significant increase in labor costs due to statutory minimum wage revisions.

    • Experienced production constraints in the open footwear category due to CNG supply issues.

    Key financials

    Single quarter

    04 metrics
    1. 01Revenue Growth12.2%+12.2%YoY
    2. 02Volume Growth11.7%+11.7%YoY
    3. 03EBITDA Margin15.9%
    4. 04Profit After Tax Growth17.7%+17.7%YoY

    Guidance & targets

    6
    CategoryTargetPriority
    Overall Growth
    Revenue Growth
    mid-double-digit
    		Medium
    ASP
    ASP Growth
    6% to 7% at least
    		High
    Profitability
    EBITDA Margin
    17 to 19%
    		High
    Profitability
    Franchise Store ROI
    18% to 30%
    		Medium
    Volume
    Sneaker Category Volume Growth
    close to 30%
    		High
    Distribution
    Number of New Stores
    80 to 120 stores
    		High

    What to watch in Q2 FY27

    5

    ASP recovery and normalization

    Q2 FY27 onwards
    CurrentSuppressed by ~4.5-5% due to Walmart accounting and school shoes mix in Q1.
    Target6-7% ASP growth.

    Why it matters

    Crucial for overall revenue growth and margin profile improvement.

    As these temporary effects normalize, we expect the underlying benefits of our pricing initiatives to become increasingly visible from Q2 onwards, supporting both reported ASP growth and a stronger margin profile in the quarters ahead.

    Risks & concerns

    5
    RiskSeverity

    Geopolitical uncertainties, global supply chain volatility, and inflationary pressures on raw materials

    Businesses continued to navigate geopolitical uncertainties, volatility across global supply chains, and inflationary pressures on key raw materials. — Management acknowledged

    medium

    Increase in labor costs due to statutory minimum wage revisions

    We absorbed a significant increase in labor costs following statutory minimum wage revisions. — Management acknowledged

    medium

    Temporary ASP suppression from Walmart accounting change and school shoes mix

    Walmart accounting change suppressed ASP by ~2.5%, and lower ASP of school shoes diluted blended ASP by ~2%. — Management acknowledged

    low

    Production constraints in open footwear category due to CNG supply issues

    Sandals category faced production lag due to CNG supply restrictions impacting hot and cold technology. — Management acknowledged

    low

    Competitive intensity from unorganized players due to RM inflation

    Production constraints also affected smaller or unorganized players due to working capital stress from RM inflation. — Both acknowledged

    medium

    Q&A highlights

    8

    “This price increase was done on effective 1st April... 8% is a reasonably fair price hike and the same has been accepted in the market. This was done about four months back now. The price hike is effective 1st April. We have not done any further revisions. The effective price increase happened effective 1st April and we have not seen too much resistance to the price increase so far. And the volume has grown in spite of the price hike.”

    Clarifies the rationale and acceptance of the 8% MRP hike, indicating it did not negatively impact volumes.

    asked by Vidisha Seth

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Performance Overview

    Campus Activewear commenced FY27 with a strong Q1, achieving 12.2% revenue growth and 11.7% volume growth. Profit after tax saw a significant increase of 17.7%, while EBITDA margins remained stable at 15.9%. This performance was delivered despite a challenging operating environment marked by geopolitical uncertainties and inflationary pressures.

    02

    Pricing Actions and ASP Dynamics

    The company implemented an 8% MRP increase across key product categories effective April 1st, resulting in an underlying ASP increase of approximately 5% in its core Stuck-On category. However, temporary factors, including a 2.5% ASP suppression due to revised Walmart accounting and a 2% dilution from an exceptional nearly 50% Y-o-Y growth in lower-ASP school shoes, partially offset these gains. Management expects ASP to recover by 6-7% from Q2 onwards as these temporary effects normalize.

    03

    Strategic Initiatives & New Launches

    Campus Activewear launched 'Elan by Campus,' entering the rapidly growing neo-casual footwear segment, which has seen positive initial response and is expected to contribute to premiumization. The company also refreshed its brand identity with a new logo and strengthened its partner ecosystem through distributor meets, securing record orders for the upcoming festive season. They are targeting 80-120 new store openings for FY27, with 18 FOFO stores opened in Q1.

    04

    Operational Headwinds & Cost Management

    The quarter saw headwinds from increased labor costs due to minimum wage revisions and approximately Rs. 2.5 crores in additional depreciation from new manufacturing facilities at Paonta Sahib and Pantnagar. Other expenses also included Rs. 5 crores for minimum wage and Rs. 2.5 crores for advertising/marketing. The company managed these through calibrated pricing actions, disciplined cost management, and operational efficiencies.

    05

    Distribution and Channel Strategy

    The company transitioned its entire franchise business from an outright model to a Sale or Return (SOR) model, impacting Q1 revenue growth by approximately 2.5% due to accounting changes, but is expected to drive aggressive growth going forward⏳. This transition, along with the launch of Elan, aims to strengthen the business for future growth across diverse channels and categories, with strong performance noted in marketplace operations (mid-double-digit growth), company-owned stores (20% SSG growth), and brand.com (over 100% growth).

    06

    Outlook and Growth Drivers

    Management is confident in achieving mid-double-digit overall growth for FY27, driven by a combination of volume and ASP growth. Key growth drivers include continued momentum in women's and kids' portfolios, strong performance in the sneaker category (targeting 30% growth), and the strategic shift in the school shoes business to higher-margin 'Stuck-On' products. The company proactively built inventory in Q1 to ensure superior availability for the upcoming festive season.

    This is an AI-generated summary of a publicly available earnings call transcript.