Go Fashion (India) Limited Q3 FY26 Earnings Call Summary

Summary

Go Fashion (India) Limited - Q3 FY 2026 Earnings Call Summary Thursday, January 29, 2026

Event Participants

Executives 2 Gautam Saraogi – Promoter and CEO, R. Mohan – CFO

Analysts 8 Akhil Parekh, Ankit Kedia, Balaji Vaidyanath, Devanshu Bansal, Gaurav Jogani, Manjeet Buaria, Prerna Jhunjhunwala, Resham Mehta, Vaishnavi Mandhaniya

Financials & KPIs

Geographic & Segment Commentary

• LFS (Large Format Stores): Revenue declined sharply as a key partner paused fresh inventory intake for 45 days and rebranded/closed 137 points of sale. Management expects this channel to normalize but remains cautious about further format changes by retail partners.
• EBO (Exclusive Brand Outlets): Now contributes 80% of total revenue. Performance varies by size; stores >500 sq. ft. show better traction due to broader product display, while <300 sq. ft. stores are facing higher degrowth and potential consolidation.
• Online & Quick Commerce: Witnessing healthy traction on platforms like Blinkit and Zepto. Though a small contributor currently, management expects organic growth as the apparel category matures in quick commerce.

Company-Specific & Strategic Commentary

• Product Diversification: The non-leggings category now contributes 65% of sales (up from <50% previously). Strategic focus is shifting toward value-added bottom wear like trousers and palazzos to meet evolving consumer preferences.
• Store Rationalization: Management is aggressively identifying “small stores” (<300 sq. ft.) for closure or relocation. These stores cannot accommodate the expanded 50-product range, leading to a poorer customer experience and double-digit SSSG declines.
• Daily Wear Pilot: Launched a “Daily Wear” concept (men’s and women’s top/bottom wear) with 6 pilot stores. Early unit economics are healthy, but management will not “rush” the pilot to fill the bottom-wear growth gap.
• Buyback & Capital Allocation: Announced a buyback of 14,13,000 shares at ₹460 per share (₹65 crores). Strategy remains focused on converting >50% of EBITDA into pre-IndAS operating cash flow.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

SSSG & Brand Health

• Question: How should we read the negative SSSG trend? (Devanshu Bansal)
• Answer: Brand relevance is intact, but footfalls are weak. Smaller stores (<300 sq. ft.) are degrowing at 9-10%, dragging the average down. Larger stores are performing better as they can display the full non-legging range (Gautam Saraogi).

LFS Disruptions

• Question: What caused the large LFS closure and sales drop? (Gaurav Jogani)
• Answer: A key partner rebranded stores and moved third-party brands out. We also lost 45 days of dispatches due to their internal inventory freeze. We cannot “recover” these lost sales in Q4 as it’s a replenishment model (Gautam Saraogi).

Expansion Strategy

• Question: Will you slow down store openings next year? (Ankit Kedia)
• Answer: Expansion will be “muted” and “selective.” We will not set a hard target; if SSSG remains negative, we will prioritize P&L health over growth. We are also focusing on relocations (Gautam Saraogi).

Pricing & Competition

• Question: Is your high gross margin/pricing a barrier to volume growth? (Akhil Parekh)
• Answer: No. Our pricing is sharp and benchmarked. Our high GMs result from a 95% full-price sales ratio. Taking a ₹100-200 price cut won’t drive footfalls but will hurt margins (Gautam Saraogi).

Key Takeaway

Go Fashion reported a challenging Q3 FY26, with revenue declining 3% and PAT falling 71% YoY, primarily due to a 5% SSSG contraction and significant disruptions in the LFS channel. Despite macro headwinds, the company maintained stable gross margins at 64.3%, underpinned by a high full-price sales ratio of over 95%. Strategically, the company is pivoting away from its legacy small-store model toward larger 500-1,000 sq. ft. formats to accommodate a product mix where non-leggings now comprise 65% of sales. Management has adopted a cautious stance on expansion, revising FY26 store additions to 60-70 and prioritizing a return to flattish SSSG. While inventory levels spiked to 114 days, a correction to 100 days is targeted by year-end. The company remains focused on cash conversion and bottom-wear dominance while carefully nurturing its “Daily Wear” pilot, expecting a gradual recovery as consumer sentiment and footfalls normalize.