Why Did Relaxo Footwears Report an 8.4% Decline in Q4 Net Profit?
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Synopsis
In a challenging quarter, Relaxo Footwears Limited has faced a notable decline in both profit and revenue. As the company navigates through restructuring and weak demand, its Chairman expresses optimism for a turnaround. Discover the financial specifics and future strategy that may reshape the brand's performance.
Key Takeaways
- Net profit decreased by 8.42% in Q4 FY25.
- Revenue dropped to Rs 695.15 crore.
- Company is undergoing internal restructuring.
- EBITDA margin for Q4 was at 16.1%.
- Final dividend proposed is Rs 3 per share.
Mumbai, May 9 (NationPress) Relaxo Footwears Limited announced a significant drop in both revenue and profits for the fourth quarter (Q4) of FY25, attributed to sluggish demand and ongoing restructuring efforts.
The net profit for the quarter ending March 31 fell by 8.42 percent to Rs 56.22 crore, compared to Rs 61.39 crore in the same quarter of the previous fiscal year, as revealed in a stock exchange filing.
Revenue from operations decreased to Rs 695.15 crore in Q4 from Rs 747.21 crore a year earlier, reflecting a 6.97 percent year-on-year (YoY) decline.
Total income also saw a reduction of 6.52 percent, falling to Rs 703.24 crore from Rs 752.27 crore in the corresponding period last year.
Chairman and Managing Director, Ramesh Kumar Dua, described FY25 as a year of consolidation.
He indicated that the performance decline was due to weak demand in the mid-range footwear segment and internal restructuring of the distribution model.
“These strategic changes were essential to create a more robust and agile business,” Dua stated.
Dua remains optimistic, believing the company has hit the lowest point of the downturn. He anticipates improvements in performance beginning in the second half of FY26 as restructuring benefits start to materialize.
“Looking forward to FY26, the company plans to concentrate on profitable growth, operational efficiencies, digital transformation, and a refined product strategy, while maintaining a steady topline with potential upward movement,” he added.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter was Rs 112 crore, down from Rs 120 crore in the same quarter of the prior fiscal year.
The EBITDA margin for Q4 was reported at 16.1 percent. For the entire financial year, EBITDA was Rs 382 crore in FY25, compared to Rs 407 crore in FY24, yielding an annual EBITDA margin of 13.7 percent.
The Board of Directors has proposed a final dividend of Rs 3 per share, equivalent to 300 percent of the face value of Rs 1.
This dividend totals a payout of Rs 74.68 crore for the fiscal year ending March 31, according to the company’s stock exchange filing.
Point of View
The financial performance of Relaxo Footwears Limited reflects broader market trends and consumer behavior. The company's proactive measures to restructure its operations highlight its commitment to adapting to market demands. As they focus on enhancing profitability and operational efficiency, the industry will be closely watching how these changes impact their market position moving forward.
NationPress
14/05/2025
Frequently Asked Questions
What caused Relaxo Footwears' decline in profit?
The decline was primarily due to weak demand in the mid-range footwear segment and ongoing internal restructuring efforts.
When does Relaxo expect to see improvements in performance?
Chairman Ramesh Kumar Dua expects performance to improve from the second half of FY26 as the benefits of restructuring start to show.
What is the proposed dividend for shareholders?
The Board of Directors has recommended a final dividend of Rs 3 per share, totaling a payout of Rs 74.68 crore.
