India’s Arvind Fashions Q2 profit rises on healthy sales

BENGALURU (Reuters) – India’s Arvind Fashions reported a 18.9% rise in the second-quarter profit on Tuesday, aided by healthy sales of clothing and footwear and as power brands helped it maintain wider margins.

The Bengaluru-based company’s consolidated net profit rose to 216.6 million rupees ($2.60 million) for the quarter ended Sept. 30 from 182.2 million rupees a year earlier, sending its shares up as much as 8%.

While consumer demand continued to remain soft, Arvind Fashions’ strong performance in the multi-brand outlet channel and tighter control over inventories resulted in higher profit, the company said.

The earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved by about 50 basis points from a year ago, it added.

Fashion retailers have seen a shift in demand due to a delayed festive season, which for 2023, began late October.

Usually, the festive season aids companies clock higher annual sales as customers spend on clothes, accessories and footwear.

Arvind Fashions, which has a portfolio of owned and licenced international brands such as Arrow and Calvin Klein, said its consolidated revenue from operations rose 7% to 12.67 billion rupees in the September quarter.

Revenue from so-called power brands like US Polo and Tommy Hilfiger, which accounts for more than 80% of the total, rose 5%.

The company’s emerging brands segment clocked a 19% jump in revenue while the footwear segment posted revenue growth of about 20%.

Last week, Arvind Fashions exited its Sephora India business as the company sold its beauty brands division to billionaire Mukesh Ambani’s retail unit Reliance Retail.

Rival Shoppers Stop last month reported a drop in the second-quarter profit.

Tata Group-owned Trent, that operates retail chain Westside, reported a near three-fold surge in profit on Tuesday.

($1 = 83.2600 Indian rupees)

(Reporting by Dimpal Gulwani in Bengaluru; Editing by Mrigank Dhaniwala)