Q3 2025 Arvind Fashions Ltd Earnings Call Transcript
Key Points
- Arvind Fashions Ltd (BOM:542484) reported a 7% sales growth in Q3, with a strong like-to-like growth of 11%, leading to the highest-ever EBITDA of INR 174 crores.
- The company achieved a significant improvement in return on capital employed, crossing 19%, with plans to exceed 20% in the medium term.
- Retail channel growth was robust at 15%, driven by increased advertising, square foot expansion, and successful celebrity collaborations.
- The gross profit margin improved by 160 basis points to 55% in Q3, aided by reduced discounting and a richer channel mix favoring direct channels.
- Arvind Fashions Ltd (BOM:542484) maintained tight control over working capital, with inventory days reduced by 5 days and debtor value down by INR 180 crores post-festival trading.
- The wholesale channel experienced a quarterly moderation due to the exit from some department store formats and destocking in muted market conditions.
- Footwear growth was impacted by BIS implementation, affecting inventory levels and assortment.
- Despite improvements, the company still faces challenges in achieving higher profitability for brands like Arrow and Flying Machine.
- The transition from B2B to B2C in the online channel is ongoing, with B2B expected to decline by 10-12% as B2C grows.
- The company is still working on optimizing its store portfolio, with closures of smaller, less profitable stores and delays in opening new large-format stores.
Ladies and gentlemen, good day. And welcome to Urban Fashions Limited Q3 FY25 earnings conference call.
(Operator Instructions)
I now hand the conference over to Mr Ankit Arora Head of Investor Relations and Treasury. Thank you and over to you, sir.
Thanks, Srutuja. Hello. Welcome, everyone, and thank you for joining us on the Arvind Fashions Limited Earnings Conference Call for the third quarter and nine months ended December 31, 2024. I'm joined here today by Kulin Lalbhai, Vice Chairman and Non-Executive Director; Shailesh Chaturvedi, our Managing Director and CEO; and Girdhar Chitlangia, our Chief Financial Officer. Please note that results, press release, and earnings presentations had been mailed across to you yesterday, and these are also now available on our website, www.arvindfashions.com.
I hope you had the opportunity to browse through the highlights of the performance. We'll commence the
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