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Trent Ltd’s December quarter results show recovery from the pain that came with the covid restrictions is progressing well.

In the June quarter, the retailer’s standalone revenues had declined by a whopping 87% year-on-year. The easing of covid-19 restrictions and improving consumer sentiment brought respite in the subsequent quarters. In the September quarter, the drop in revenues was curtailed at 45%. Things improved further in the December quarter with a fall of 17%.

Trent has done well on the profitability front in the December quarter. Reported gross profit margin expanded by 574 basis points to 56.4%. One basis point is 0.01%.

“Adjusting for a write-back on inventory provision from the earlier quarter, gross margin expanded 3.8 percentage points y-o-y to 54.4%," said analysts from Jefferies India Pvt. Ltd in a report on 5 February. “Part of this is because of a higher share of full-priced merchandise along with lower inventory provisions," it said.

Trent’s recovery prospects are expected to be better. The company said in January (the end of season sale month), traction for full-priced merchandise at Westside was consistent with levels witnessed y-o-y. Plus, the strong balance sheet helps.

Shares of Trent are still about 13% away from the pre-covid highs of February 2020. With consistent recovery, the trend in the stock can be expected to reverse.

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