Indian apparel retailer Arvind accounted for a 40 per cent drop in its first-quarter profit, as inflationary pressures impacted consumer expenditure on apparel, even with discounts. The company’s combined net profit reduced to Rs. 39.3 crore from Rs. 65.8 crore a year earlier. The company sells international brands like Tommy Hilfiger, Arrow and Calvin Klein in India.

The Indian textile sector experienced weak demand throughout FY 2024, as consumers grew cautious about spending on non-essential items. Retail inflation for the April-June quarter stayed around 5 per cent, pushed majorly by high food prices, which lead to reduced spending on discretionary goods.

Arvind witnessed a 1 per cent decline in revenue from operations, with its core textile segment—accountable for 73 per cent of total sales—dwindling by 5 per cent in comparison to last year. The company also shared disruptions caused by “illegal workers’ unrest” at its largest factory, which disturbed performance in the woven and denim segments for 21 days. This strike had an projected revenue impact of around Rs. 200 crore.

Despite efforts by retailers to entice customers with discounts, Arvind’s total expenses rose by 1 per cent, putting extra strain on its margins. The advanced materials segment, which manufactures fabrics and protective gear for construction, witnessed a 4 per cent decline.