Arvind Fashions, based in Bengaluru, India, announced an impressive 18.9 per cent increase in second-quarter profits, attributing the growth to strong sales of clothing and footwear, as well as the resilience of its power brands that bolstered overall margins. The company’s consolidated net profit soared to Rs. 216.6 million (US $ 2.60 million) for the quarter ending on 30th September, up from Rs. 182.2 million in the previous year, prompting an 8 per cent surge in its shares.
Despite soft consumer demand, Arvind Fashions thrived in the multi-brand outlet sector and managed inventories efficiently, leading to higher profits. The company emphasised that its prudent control over inventories, particularly in the multi-brand outlet channel, played a pivotal role in this achievement. The earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin saw a significant improvement, rising by approximately 50 basis points compared to the previous year.
Arvind Fashions, known for its portfolio of both owned and licensed international brands like Arrow and Calvin Klein, reported a 7 per cent increase in consolidated revenue, reaching Rs. 12.67 billion in the September quarter. The revenue from its dominant “power brands,” including US Polo and Tommy Hilfiger, which constitute over 80 per cent of its total revenue, rose by 5 per cent.
The company experienced a 19 per cent surge in revenue from its emerging brands segment, while the footwear division recorded a substantial revenue growth of about 20 per cent.
Recently, Arvind Fashions divested its Sephora India business, selling its beauty brands division to Reliance Retail, owned by billionaire Mukesh Ambani.
