Relaxo Footwears Limited reported a 21 percent decline in net profit to Rs 44 crore ($5.3 million) for the first quarter ended June 30, as against Rs 56 crore in the year-ago quarter.
The company’s revenue for the quarter rose marginally to Rs 748 crore, as against Rs 739 crore in the corresponding quarter of the previous year.
Commenting on the results, Ramesh Kumar Dua, chairman managing director in a statement said, “The company reported nominal revenue increase during the quarter, largely due to weak consumer sentiments driven by election related disruptions and severe heat conditions in many parts of India. We operate in a labour-intensive industry which was impacted by an abnormal increase in minimum wages as mandated by the government.”
“We decided not to pass on the higher costs to consumers in the current subdued market conditions, which has impacted profitability in this quarter. Capex incurred to manufacture higher volumes in the future have also led to higher depreciation expenses in this quarter,” he added.
Relaxo is one of the leading footwear makers in India and sells under brands Sparx, Flite, and Bahamas. It currently has over 405 exclusive-brand outlets across the country.
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