Iris Clothings announced its Q3 & 9M FY2024 Results

Q3 FY24 Key Financials at a Glance:

– Total Income was ₹235 Million, up 15% YoY and down 27% QoQ

– YoY growth was driven by volume uptick given strong demand in existing product categories, especially infant wear, along with contribution from newer initiatives like DOREME x Disney and EBOs

– QoQ drop was primarily due to strong Q2 when distributors pile up inventory for winter wear.

– EBITDA margin stood at 23%, up 732 bps YoY and down 44 bps QoQ

– YoY improvement was primarily due to the normalization of raw material prices, which were impacting margins during Q3FY23

– PAT margin stood at 8%; up 455 bps YoY and down 299 bps QoQ

Outlook

– Expect to see robust demand for summer wear in Q4FY24, primarily driven by product enhancements in the infant wear vertical and the launch of new designs under the DOREME x Disney brand.

– EBITDA margin to be in the range of 23% – 25% for FY24.

Commenting on the Company’s performance, Mr. Santosh Ladha, Managing Director of the Company, said, “I am pleased to share that we had a good quarter given the significant improvement in margins as compared to the same quarter last year. On a YoY basis, revenue growth was primarily driven by product enhancements made in the infant wear vertical, along with multiple launches under the DOREME x Disney brand. We expect these two reasons to drive our performance in Q4 as well. Moreover, with distributors generally piling up inventory for the upcoming summer season in the fourth quarter, we expect Q4 to be the best quarter of FY24.

We plan to open three more Exclusive Brand Outlets in Kolkata in the current quarter. This would be in addition to the two EBOs that we opened a couple of months ago. We have been elated to see the response and expect a significant contribution from these stores in FY25.”

Business Highlights for 9MFY24

– Inauguration of two Exclusive Brand Outlets (EBOs)

– Iris revealed its strategy to expand via EBOs after building a strong retail distribution network over the years and launching a D2C e-commerce website in FY23.

– The Company opened its first store in Howrah in September, followed by another one in Star Mall, Kolkata, in October to fully take advantage of the ongoing festive season.

– Multiple launches post signing the two license agreements with UTV Software Communications (Disney) to design apparel using Disney and Marvel characters.

– Launched and dispatched the first batch of summer wear collection under the DOREME x Disney brand across India in April

– Launched winter wear apparel in July.

– Infants wear vertical

– Iris has expanded the product categories in this segment by 1.5x

– Built a robust B2B platform for wholesalers.

– Widely accepted by all distributors, with most of the orders coming from the app

– Expanding distribution network

– Added 15+ new distributors across India.

– Entered Nagaland and strengthened presence in Maharashtra, West Bengal, Tamil Nadu and Uttar Pradesh.

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