Indian footwear company Bata's Q4 earnings plummet by 28%, settling at 46 crore rupees
India-Based Footwear Brand Bata Sees Profit Drop in Q4 FY25
Footwear retail giant Bata India reported a notable decline in its fourth-quarter net profit for the financial year 2024-25, due to soft market demand and a slight increase in operational expenses. The company's revenue, however, remained relatively stable, dipping only 1.2% to INR 788.2 crore during the said quarter.
Bata India's net profit dropped by 27.8% to INR 45.9 crore compared to the same quarter of the previous financial year. Meanwhile, operational expenses rose 1.5% to INR 748.3 crore.
In a silver lining, the company reported a rise in product volumes for the second consecutive quarter, driven primarily by e-commerce and franchise channels. Bata India has been implementing a zero-based merchandising approach in select stores, which has helped reduce aged and outdated inventory.
Gunjan Shah, Managing Director and CEO of Bata India, stated, "We continued to emphasize caution in cost management, focus on efficiency, and productivity, while maintaining a strong deployment of fresh merchandise in anticipation of a demand revival."
The company expanded its retail network by adding 19 franchise stores, increasing the total number of stores to 1,962. Bata India also ventured into the quick commerce space last December.
In addition, the company focused on offering more affordable products and streamlining its stock keeping units (SKUs). These initiatives, coupled with improved inventory management and merchandising strategies, have led to a significant improvement in key inventory metrics.
The board of directors recommended a final dividend of INR 9 per share, while in September, the company had distributed an interim dividend of INR 10.
While Bata India faced challenges, its strategic measures aim to steer the company through market turbulence and pave the way for future growth.
- The decline in Bata India's net profit for Q4 FY25 could potentially impact the finance industry, as a major player in the footwear market experiencing financial struggles may lead to questions about the broader retail sector.
- Amidst the challenging market conditions, Bata India is exploring new avenues for growth, venturing into the quick commerce space and focusing on more affordable products, which aligns with the broader trends in the defi (decentralized finance) and finance industries where accessibility and affordability are key.
- Despite the profit drop, Bata India's board of directors remains optimistic about the future, recommending a final dividend of INR 9 per share, indicating continued belief in the financial health and growth potential of the business.
