Mumbai: Shoppers Stop Ltd reported a consolidated net loss of Rs5.58 crore for the three months ended September, against a profit of Rs10.23 crore in the corresponding year-ago quarter, as buyers kept away from its flagship stores.
Consolidated revenue for the K. Raheja Corp. group company, which operates large-format department stores and specialty stores such as Crossword and Mothercare, grew 13% to Rs909.16 crore helped by its new stores.
Parent department store chain Shoppers Stop’s net profit fell 67.21% to Rs6.38 crore and revenue grew 17% to Rs664 crore. Bloomberg had estimated a net profit of Rs24.8 crore and net sales of Rs675 crore for Shoppers Stop, which accounts for more than 60% of overall revenue.
Consumer sentiment remained weak during the quarter and the number of shoppers entering Shoppers Stop stores that have been open for at least five years fell 6%. Sales volumes at these stores fell 4%.
“Amidst the changing business environment and economic reforms, Shoppers Stop has continued on its growth trajectory,” Govind Shrikhande, customer care associate and managing director, Shoppers Stop, said in a statement.
“I am seeing a revival in consumer sentiment with sales in the month of October looking good,” he said, adding that he expects like-to-like sales growth of 8-9% in the December quarter, along with better profitability, for the stores. Like-to-like sales is a measure of growth based on sales in stores that have been open for at least a year.
“The company’s volumes continue to remain pressurized on account of inflation and price hikes,” said equity analyst Apurva Prasad of ITI Securities Ltd. He was, however, optimistic about better performance in the third quarter on account of the festive season.
In the second quarter, the retailer added two Shoppers Stop stores, taking the total to 54. It added one Home Stop store, taking the tally to 12. It also opened two new Crossword stores and closed one in Pune. The company now has more than 4.78 million sq.ft. of total retail space in 25 cities.
The company’s loss-making hypermarket subsidiary HyperCity also pulled down overall profit. In the second quarter, HyperCity’s net loss rose to Rs20.94 crore from Rs18.21 crore in the same period last year. Its sales grew 5.3% to Rs201.72 crore in the quarter from Rs191.53 crore last year.
Shrikhande expects HyperCity to turn profitable in 30 months.
Shoppers Stop ended Tuesday at Rs419.95 on BSE, down 0.63% from its previous close, while the benchmark Sensex fell 1.1% to close at 18,430.85 points.