Credo Brands Marketing Reports Revenue Decline Amid Supply Chain Disruptions and Increased Marketing Spend in Q2 FY26

Credo Brands Marketing Limited , the company behind the popular MUFTI brand, reported a decline in revenue for Q2 and H1 FY26, citing supply chain disruptions and muted footfalls. The company, however, remains focused on its MUFTI 2.0 transformation strategy, increasing marketing spend and opening new premium flagship stores.

Financial Performance

For the second quarter of FY26, Credo Brands Marketing reported revenue of INR 164.00 crores, down from INR 186.00 crores in Q2 FY25. The half-yearly revenue for FY26 stood at INR 284.00 crores, compared to INR 310.00 crores in H1 FY25.

Despite the revenue decline, the company maintained its EBITDA margins at approximately 28%. The gross profit margin improved by 200 basis points year-on-year to approximately 59%, driven by changes in the product mix.

Key Highlights

Supply Chain Disruptions: The company faced temporary supply chain disruptions from Bangladesh, which delayed product availability for the quarter. These goods have been dispatched in Q3, and the associated revenue is expected to flow into the next quarter.
Increased Marketing Spend: As part of its MUFTI 2.0 transformation strategy, the company increased its marketing spend to 5% of revenue, up from 3.5% last year.
New Store Openings: Credo Brands opened 5 new premium flagship stores, aligning with its premiumization strategy.
Online Sales Growth: Sales through the company's website more than doubled year-on-year in H1 FY26, reflecting stronger brand salience and an enhanced omnichannel journey.

Working Capital and Inventory Management

The company's working capital days stood at 217 days for H1 FY26, an increase attributed to current market conditions and support provided to franchisees and MBO partners due to slower stock liquidation. Management assured that receivables remain fully secured through deposits and long-standing partner relationships.

Future Outlook

Kamal Khushlani, Chairman and Managing Director, stated, "We expect to see that growth. Like even in Q3, we should be higher than last year because some of the sales moved into Q3 due to supply chain issues from Bangladesh." The company anticipates a flattish growth for the current year but expects to return to a growth trajectory in the following year.

Credo Brands Marketing remains committed to its premiumization strategy, focusing on delivering an enhanced experience at the final consumer touch point rather than simply charging more. The company expects its EBITDA to remain in the range of 27% to 30% in the coming years, as previously guided.

As the company continues to implement its MUFTI 2.0 strategy, it plans to scale marketing and digital investments to increase awareness among potential consumers. Management expressed confidence in the brand's ability to bounce back to previous levels of performance in the medium term.

Investors and analysts will be closely watching the company's performance in the coming quarters to see if these strategic changes translate into renewed growth and improved financial results.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.01%	-10.16%	-8.93%	-24.50%	-39.62%	-67.04%

Credo Brands Marketing (Mufti) , the company behind the popular men's casual wear brand MUFTI, has unveiled plans for expansion and growth in the coming years. The company aims to achieve a 15-18% annual growth rate, primarily driven by its strategic retail expansion across tier 2 and tier 3 cities in India.

Expansion Strategy

Credo Brands plans to open over 100 new stores in the next three years, focusing on high-potential markets and strategic locations. This expansion is part of the company's transition journey, dubbed 'MUFTI 2.0', which aims to offer consumers a premium retail experience, elevated merchandise, and stronger brand storytelling.

Financial Performance

For the quarter ended September 30, Credo Brands reported the following financial results:

Metric	Q2 FY26	Q2 FY25	YoY Change
Revenue from Operations	₹163.73	₹185.57	-11.77%
Net Profit	₹18.87	₹26.46	-28.68%
EBITDA	₹48.10	₹57.60	-16.49%
EBITDA Margin	29.40%	31.10%	-170 bps

Despite a year-on-year decline in revenue and profitability, the company remains optimistic about its future prospects. Kamal Khushlani, Chairman and Managing Director of Credo Brands, attributed the temporary setback to soft demand, muted footfalls, and supply chain challenges from Bangladesh, which impacted the availability of fast-moving SKUs.

Growth Initiatives

Premium Store Expansion: The company has opened 5 new premium flagship stores in high-potential markets during the first half of FY26.
Digital Push: Credo Brands is increasing its focus on digital channels, with sales through MUFTI's website more than doubling year-on-year in H1 FY26.
Marketing Investments: The company plans to increase its marketing investments to enhance brand visibility and strengthen consumer connect.
Product Mix: Credo Brands is focusing on premium casual and athleisure segments to drive growth and improve margins.
Omnichannel Strategy: The company is leveraging e-commerce and omnichannel integration to increase customer reach and drive sales.

Future Outlook

Looking ahead, Credo Brands expects stronger demand led by the festive and wedding seasons, as well as positive impact from recent government reforms. The company aims to achieve a 20% margin expansion through cost efficiency measures and brand premiumization.

Mr. Khushlani stated, "The company remains confident in its strategic direction and committed to its vision of becoming one of India's leading premium apparel brands."

As Credo Brands navigates through current market challenges, its focus on premium retail experiences, digital growth, and strategic expansion in tier 2-3 cities positions it for potential long-term growth in India's competitive apparel market.