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Business News/ Markets / Stock Markets/  Metro Brands shares slump 6% after Q3 earnings miss estimates
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Metro Brands shares slump 6% after Q3 earnings miss estimates

Metro Brands reports a 12.38% decline in Q3 FY24 net profit due to increased expenses and slower sales, causing its shares to drop 6%. The revenue from operations in the quarter recorded 6.17% YoY growth, reaching ₹636 crore.

Metro Brands experienced a notable increase in both employee and finance costs, rising by 21% and 23% YoY, respectively. Other expenses also surged by 13.21% YoY. (HT)Premium
Metro Brands experienced a notable increase in both employee and finance costs, rising by 21% and 23% YoY, respectively. Other expenses also surged by 13.21% YoY. (HT)

Shares of Metro Brands, one of the largest Indian footwear specialty retailers, slumped by 6% in today's early trade, reaching 1,140 apiece after the company's Q3FY24 earnings missed the street estimates.

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For the December ending quarter, the company posted a consolidated net profit of 99 crore, reflecting a 12.4% decline from the 113 crore net profit reported in Q3 FY23, driven by a sharp rise in expenses and a slowdown in sales.

On a sequential basis, however, the net profit exhibited a 45% improvement compared to the preceding quarter's 68 crore.

The revenue from operations in the quarter recorded 6.17% YoY growth, reaching 636 crore. Notably, this represents the slowest growth since the company went public in December 2021, although it stands as the highest-ever quarterly revenue for the company.

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During the reporting quarter, Metro Brands experienced a notable increase in both employee and finance costs, rising by 21% and 23% YoY, respectively. Other expenses also surged by 13.21% YoY.

The company opened 31 new stores in Q3 FY 2023–2024, bringing the total new store count to 87 stores this fiscal year. With this expansion, the company is firmly advancing on its trajectory to meet the target of 100 stores for FY 2023–2024, Metro Brands said in its earnings report.

During the quarter, the company signed a long-term partnership agreement with Foot Locker, Inc., the New York-based specialty athletic retailer. The partnership grants MBL exclusive rights to own and operate Foot Locker stores in India.

The company said it is currently in the process of liquidating the FILA inventory and closing most of the Exclusive Brand Outlets (EBOs). The company aims to achieve these goals by the end of FY 2023–2024.

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Looking ahead to FY 2024-2025, the company plans to strategically reposition the FILA brand, and in FY 2025-2026, its focus will be on boosting growth and enhancing prominence in the athleisure industry, as highlighted by the company in its earnings report. 

Metro Brands retails footwear under its own brands of Metro, Mochi, Walkway, Da Vinchi, and J. Fontini, as well as certain third-party brands such as Crocs, Fitflop, Fila, Skechers, Clarks, Puma, and Adidas.

As of December 31, 2023, the company operated 826 stores across 192 cities spread across 31 states and union territories in India.

The company's shares delivered a return of 44% in CY23 and 93% in CY22. At the current level, the shares are trading 128% higher than their issue price of 500 apiece.

At 10:00 am, the stock was trading with a drop of 4.25% at 1,161 apiece.

 

Disclaimer: We advise investors to check with certified experts before making any investment decisions.

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Published: 19 Jan 2024, 10:08 AM IST
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