Arvind Fashions' Q1 profit drops 24% despite strong revenue growth

Mumbai: Arvind Fashions, which retails premium international brands such as Arrow, Calvin Klein and Tommy Hilfiger in India, reported a 23.8 per cent decline in consolidated net profit for the first quarter of FY27, as rising costs offset strong revenue growth.

The company's net profit fell to Rs 9.6 crore for the quarter ended June 30, compared with Rs 12.6 crore in the same period last year, according to its stock exchange filing.

Despite the drop in profit, revenue from operations rose 15.5 per cent year-on-year to Rs 1,279 crore from Rs 1,107 crore, supported by healthy consumer demand and increased marketing investments across its brand portfolio.

Managing Director and CEO Amisha Jain said the company had started the financial year on a strong operational footing, delivering 15.5 per cent revenue growth and a 19.6 per cent rise in EBITDA.

She noted that the performance came amid an inflationary environment driven by the conflict in West Asia, higher crude oil prices, elevated foreign exchange rates and minimum wage hikes in several states.

"The results reflect the resilience of our brand portfolio and the discipline of our operating model," Jain said.

Looking ahead, she said the company would continue to focus on expanding its retail and business-to-consumer (B2C) channels while closely monitoring the impact of geopolitical developments.

The company's EBITDA margin improved to 12.5 per cent during the quarter from 12 per cent a year earlier, indicating better operating efficiency.

However, total expenses increased 15 per cent to Rs 1,245 crore, putting pressure on overall profitability.

Arvind Fashions said rising raw material costs, partly linked to the Iran conflict, weighed on input prices during the quarter. It also cautioned that continued geopolitical tensions in West Asia and the possible impact of El Niño on the monsoon could fuel inflationary pressures in the months ahead.

The company further warned that higher raw material costs and a weakening rupee could affect its future capital expenditure plans.

Following the announcement of its quarterly results, shares of Arvind Fashions declined around 3.4 per cent in trading.

Arvind Fashions operates a portfolio of premium and international fashion brands in India, including Arrow, Calvin Klein, Tommy Hilfiger and several other lifestyle labels.

With inputs from IANS