Arvind Fashions (ARVINDFASN) Q3 24/25 earnings summary

Executive summary

• Achieved 7% sales growth in Q3 FY25, with consolidated revenue at ₹1,202.76 crore and nine-month revenue at ₹3,430.78 crore, driven by strong retail and online channels despite muted market conditions.

• EBITDA reached a record ₹174 crores in Q3 FY25, up 16% year-over-year, with margin expansion of 110+ bps and PAT from continuing business up 71% in Q3 and 133% YTD.

• Direct channels (retail and online B2C) now contribute 55% of revenue, with B2C online growing 20% in Q3 and expected to reach two-thirds of online sales in the next six months.

• Retail channel grew 15% in Q3, supported by advertising, store expansion, improved customer experience, and celebrity collaborations.

• Net profit for Q3 FY25 was ₹46.52 crore, with nine-month net profit at ₹105.47 crore, both up year-over-year.

Financial highlights

• Q3 FY25 revenue: ₹1,202.76 crore (up 7% YoY); nine-month revenue: ₹3,430.78 crore (up 8.4% YoY).

• Q3 EBITDA: ₹174 crores (16% YoY growth); YTD EBITDA: ₹467 crores (up 18% YoY); EBITDA margin improved by 110+ bps to 14.5% of NSV.

• Gross profit margin rose 160 bps to 55% in Q3; YTD gross margin at 53.3%, up 80 bps.

• Inventory turns improved to 4.2; inventory value reduced by ₹40 crores since September 2024; debt reduced by ₹180 crores post-festival.

• Consolidated EPS for Q3 FY25 was ₹2.09, up from ₹1.22 in Q3 FY24.

Outlook and guidance

• Targeting 12%-15% annual revenue growth, with direct channels and adjacency categories as key drivers.

• EBITDA margin expected to improve by at least 100 bps annually, with Arrow and Flying Machine contributing above average.

• Square footage expansion guidance at 15% net addition per year, focusing on larger, high-quality stores.

• Continued focus on branded apparel as the core business, with operational efficiency and brand portfolio rationalization.

• Expectation of continued growth momentum with new season launches and further profitability improvement through channel mix and cost optimization.