BENGALURU, May 23 (Reuters) - Page Industries, which licenses Jockey International's products in India, reported smaller-than-expected profit and revenue on Thursday, hurt by high inventory costs and subdued demand.
The company, which manufactures and distributes innerwear, sportswear and athleisure for the brand, reported a profit of 1.08 billion rupees ($13 million) for the quarter ended March 31, falling short of analysts' estimates of 1.32 billion rupees, as per LSEG data.
Soaring inventory costs hit Page Industries' bottom-line even as post-COVID demand for its innerwear and athleisure collections stayed steady.
The company reported an inventory cost of 364.6 million rupees, compared to a negative 1.83 billion rupees in inventory value a year ago.
Its total expenses fell just 0.5%, while raw material costs fell 12.6%.
Persistent inflation has prompted consumers to switch to cheaper alternatives, denting the company's top-line as well.
The Bengaluru-based company, which also licenses the Speedo swimwear brand in India, reported a 3.2% rise in its revenue from operations to 9.95 billion rupees, but missed analysts' average estimates of 10.98 billion rupees, as per LSEG data.
"Despite a temporary boost during the festive season last quarter, the retail sector continued to face subdued demand in the fourth quarter," the company said in a statement.
It is also facing an increase in competitive intensity from both organised and unorganized sectors, it added.
However, the company said it expects a "significant" growth in the athleisure market over the next decade.
Peer Arvind Fashions reported a more than two-fold rise in profit on steady demand for its more diverse premium clothing portfolio that includes casual and formal wear.
Page Industries' stock has fallen 10.6% in the March quarter and is down 7.6% so far this year. It closed 2.1% lower after the results on Thursday.
($1 = 83.2330 Indian rupees)
Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Janane Venkatraman
Source: Reuters