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Slightly weaker, with revenue and EBITDA up 8-9% YoY

• Consolidated revenue grew ~9% YoY on a weak base to INR6.2b (2% below), driven by an increase in wedding-related footfalls during 1QFY26.
• The growth was largely driven by ~8% YoY area additions, as quarterly SPSF declined ~3% YoY to INR4,350/sq ft.
• In-store sales grew modest ~4% YoY (vs. ~5% YoY in 4QFY24), driven largely by 8% YoY area additions.
• The company added 23 stores and closed three stores, bringing the count to 928 stores. Format-wise, MBL added five stores in Metro, nine in Mochi, two in Crocs, and four in Walkway.
• E-commerce sales grew ~45% YoY to INR840m.
• Gross profit grew 9% YoY to INR3.7b (2% below) as margins moderated 15bp YoY to 59.3% (~20bp below our estimate), likely due to a higher share of e-commerce in the revenue mix.
• EBITDA grew 8% YoY to INR1.9b (6% miss) due to slightly weaker growth and higher other expenses (higher marketing spends on brand building and positioning).
• Other expenses rose 13% YoY (5% above) and employee expenses grew 6% YoY (4% below), leading to ~45bp YoY EBITDA margin contraction (115bp miss).
• Depreciation/finance costs rose 15%/14% YoY, while other income rose 22% YoY.
• PBT at INR1.3b grew 6% YoY (broadly in line) as lower EBITDA was offset by higher other income and lower finance costs.
• PAT grew 7% YoY to INR0.99b (in line).

Update on new business formats

• Foot Locker –
• MBL launched its first Foot Locker store in India in October 2024 (New Delhi, Nexus Select City Walk), and the performance has been largely in line with management’s expectations.
• MBL remains cautious on expansion due to supply chain related concerns following the BIS implementation; however, it plans to open three additional stores before the festive season in 3QFY26.
• Fila –
• To counter BIS import challenges, local manufacturing of FILA products has commenced.
• FILA’s repositioning is progressing as planned, and the company is on track to open new EBOs for FILA in 2HFY26.
• Launch of New Era –
• The first kiosk opened in Bengaluru (Oct 2024), followed by Hyderabad and Mumbai, with the New Era India website going live in 4QFY25.
• Further kiosk/store additions are planned for 2QFY26 onwards.
• Clarks’ partnership – MBL signed a long-term partnership agreement with Clarks to become its exclusive licensee and distributor (for all channels) across India, Nepal, Bangladesh, Bhutan, Sri Lanka, and Maldives.

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