Citing inflationary pressures that dampened consumer spending on apparel despite ongoing discounts, Indian clothing retailer Arvind Ltd reported a 40 per cent drop in profit during Q1, FY25.
The company’s consolidated net profit declined to Rs393.1 million ($4.7 million) during the quarter, from Rs658.7 million in the corresponding quarter of the previous year.
Indian textile manufacturers faced a challenging demand environment throughout fiscal year 2024, as consumers were hesitant to spend on discretionary items. The retail inflation rate for the April-June quarter hovered around 5 per cent, primarily due to high food prices, which led to reduced spending on non-essential items.
Arvind Ltd also experienced a 1 per cent decline in revenue from operations, with revenue from its core textile segment—which constitutes 73 per cent of total sales—dropping by 5 pre cent year-on-year. The company also highlighted issues such as ‘illegal workers' unrest’ that disrupted operations at its largest factory for 21 days, impacting its woven and denim segments and causing an estimated Rs2 billion loss in revenue.
Total expenses for the company rose by 1 per cent, further squeezing its margins. The advanced materials segment, which includes fabrics and protective gear for construction work, also saw a decline of about 4 per cent.
