BackShoppers Stop consolidated net profit at Rs3.78 crore
Due to longer sales period and discounting, standalone revenues increased 17%
Premium
Mumbai: Following a turnaround of its hyper market subsidiary Hyper City, Shoppers Stop Ltd reported a second-quarter consolidated net profit of 3.78 crore.
In the year-ago September quarter net loss was 3.18 crore. Retail turnover for the K. Raheja Corp. group company, which operates large-format department stores and speciality stores such as Crossword, Mothercare, M.A.C., and hypermarkets under the HyperCity brand, increased 13% to 1,263.40 crore from 1,115.61 crore.
Second quarter stand-alone net profit of Shoppers Stop, which is of the departmental store chain Shoppers Stop grew 60% from a year earlier as the company kept a tight control on costs and saw an increase in its like-to-like sales.
Net profit increased to 15.9 crore in the three months ended 30 September from 9.91 crore in the year earlier. Due to a longer sales period and discounting standalone revenues increased 17% to 942.76 crore from 804.9 crore. The growth in revenues was led 11% growth in like-to-like sales growth and 7% volume growth. Like-to-like same store sales growth is a measure of growth based on sales in stores that have been open for at least a year.
A Bloomberg poll of over nine analysts estimated standalone net profit at 12.98 crore and standalone net sales of 850.1 crore.
“This is one of the best quarters we have had in a long time," said managing director Govind Shrikhande while pointing out that the standalone volume growth has grown and so has like-to-like. In the past year volume growth was on an average in the range of 3-4%.
However, the numbers are still not reflective of a turnaround in the consumer sentiments. Consumer footfalls or entry in stores, one of the key operational indicators have yet not picked up and on a like-to-like basis at the Shoppers Stop department store have fallen by 6.7%. “There is positivity regarding the new government and the announcements made but the economic growth has yet to happen," said Shrikhande, who feels that the spending will pick up in the first quarter of the new financial year. “Currently, it is still a little muted," he said.
Meanwhile, the numbers have exceeded analyst expectations.“This is a good set of numbers and have exceeded our expectations," said Abhishek Ranganathan, vice president, PhillipCapital (India) Pvt. Ltd and added that it’s led by HyperCity becoming profitable and also gross margins expansion due to better product mix and better absorption of costs liker rent and other expenditures.
Yet on Wednesday, Shoppers Stop lost 5.46% to 494.70 on BSE even as the exchange’s benchmark Sensex gained 0.20% to close at 27,915.88 points.
Consolidated net profit includes hypermarket chain HyperCity which reported an operating profit breakeven of 20 lakh for the first time since inception.
In the second quarter, the retailer added three Shoppers Stop stores, one Homestop store, two company-owned Crossword stores and eight Crossword Franchisee stores. The company now has 5.65 million square feet area, across 33 cities.
On Tuesday, retail chain Trent Ltd has reported that its standalone net profit had dropped to 11.43 crore in the September quarter, compared with 15.6 crore a year ago, missing analysts’ expectations. Future Lifestyle Fashions Ltd is expected to announce its earnings on Friday.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
