Turkish denim retailer Mavi Giyim Sanayi ve Ticaret A.S. posted expanding margins in the first half of 2026 despite ongoing inflation pressures in its home market, presenting detailed results on September 16.
Second-quarter EBITDA rose 4% to TRY 2,065 million, with EBITDA margin expanding 70 basis points to 16.4%. Net income climbed 9% to TRY 239 million, while profit before tax surged 117% year-over-year. Gross margin expanded to 53.1%, up from 51.3% in the prior-year period, aided by pricing power even as consumer purchasing power weakened.
Under IAS 29 inflation accounting standards, which restate financials for Turkey's high inflation, consolidated revenue grew just 0.4% in Q2. On a constant-currency basis excluding IAS 29 effects, revenue grew 30% in the half to TRY 24,351 million. Like-for-like sales in Turkey grew 31.3% nominally but fell 0.6% in real Turkish lira terms under IAS 29. Total retail sales volumes in Turkey grew 7.3% in Q2, though value growth was just 0.7%.
International operations provided a brighter picture. Global revenue grew 3% in constant currency, led by a 24% surge in the U.S. business. Online sales in Turkey declined 1.1%, while global online sales fell 3.9% to TRY 2,593 million, representing 10% of total sales. Product-category performance was mixed: denim, which accounts for 38% of Turkey retail net sales, declined 2% to TRY 6,843 million, while accessories grew 8% and non-denim bottoms grew 8%.
For the full first half, consolidated revenue totaled TRY 25,832 million, down 1.1% year-over-year under IAS 29. Excluding IAS 29, H1 EBITDA grew 25% to TRY 5,048 million with a 20.7% margin, compared with 18.2% previously. Net income was TRY 807 million on a 3.1% margin, versus TRY 1,340 million (5.1% margin) a year earlier. Operating cash flow reached TRY 4,216 million with cash conversion improving to 90% from 63%.
Inventories declined 7% to TRY 8,074 million as of July 31, standing at 30.9% of last-twelve-months cost of goods sold. Net cash stood at TRY 6,664 million, down 15% from TRY 7,853 million at the start of the year. Capital expenditures totaled TRY 1,325 million, or 5.1% of sales. Total debt was 70% denominated in U.S. dollars, 16% in Russian rubles and 14% in Canadian dollars, with a blended average cost of debt of 8.1%.
Mavi revised its full-year 2026 revenue growth outlook to a low single-digit decline to flat, down from an initial target of 5% plus or minus 1%. EBITDA margin guidance was maintained at 18% plus or minus 0.5%. Capex targets remain at 6% of sales, alongside plans for 15 net new stores in Turkey, 15 expansions, 30 upgrades and six new North American locations.
Recent trading momentum accelerated sharply. August Turkey retail sales grew 25% year-over-year on a non-IAS 29 basis, with online sales surging 30%. In the first two weeks of September, Turkey retail sales grew 24%, and back-to-school sales jumped 42% in the second week alone.
The board approved a second phase of share buybacks, allocating TRY 1 billion over up to one year with plans to cancel repurchased shares through capital reduction procedures. Shares rose 8.45% to $37.20 following the presentation.
Mavi operates across 30 countries with 497 monobrand stores, approximately 4,000 points of sale and 6,048 employees. Its largest market is Turkey, which generated 91% of consolidated revenue, followed by wholesale networks spanning 1,400 doors in the U.S., 650 in Canada and 159 in Russia.
