Shoppers Stop shares surge 11% to 10-week high on healthy Q3 performance

Stock market today: Shares of Shoppers Stop, a leading department store with premier fashion and beauty brands, surged 11% in early morning trade on Wednesday, January 15 to a 10-week high of ₹688.70 per share after the company posted a healthy set of numbers for the December-ending quarter.

The company, on Tuesday post-market hours, reported a 37% year-on-year (YoY) growth in standalone net profit to ₹49 crore in Q3FY25, while revenue from operations rose 9% YoY to ₹1,311 crore. On the operational front, EBITDA increased to ₹240 crore during the quarter, up from ₹215 crore in the same period last year. The EBITDA margin improved by 400 basis points on a quarter-on-quarter (QoQ) basis, reaching 18%, while remaining flat on a YoY basis.

The department store chain highlighted that First Citizen Members contributed 83% to its sales, of which 69% were repeat customers and 14% came from new members. Its Premium Black Card members accounted for 17% of sales, with a 28% YoY increase—the highest contribution since the launch of the Black Card a few years ago, as per the company's earnings filing. 

The beauty segment achieved sales of ₹268 crore, up 3% YoY, driven by a 14% growth in fragrances. The company’s 100%-owned subsidiary, Global SS Beauty Brands, clocked revenue of ₹78 crore during the quarter, reflecting a 26% YoY growth. Focusing on profitable growth, sales of private brands reached ₹186 crore, contributing 12% to overall sales and 18% to the apparel segment.

In terms of store expansion, the company opened 16 stores during the reporting quarter, including nine INTUNE stores, six SS Beauty stores, and one department store. The total capex spend was ₹53 crore. Additionally, the company plans to add 26 INTUNE stores and six department stores in Q4 this year.

Commenting on the Q3FY25 results, Kavindra Mishra, MD and CEO of Shoppers Stop, emphasised the company's resilience in a challenging economic environment. He said, “We ended Q3 on a fairly positive note, and the growth trajectory of the business is heading in the right direction. We have delivered healthy volume-led revenue growth of 9% and LFL growth of 4%, despite higher inflation and a decline in consumer spending."

Mishra noted several initiatives undertaken during the quarter, including “India Weds with Shoppers Stop,” “Gifts of Love,” “Winter Magic Campaign,” “ShowStoppers,” and “Singles Day” in Beauty. These efforts contributed to increased premiumization, with premium categories accounting for 64% of total revenue.

"We have improved every KPI during the quarter. Our strategic focus is to make private brands profitable. The beauty category continues to grow, with sales up 3%, led by a 14% rise in fragrances. Our flagship store at Inorbit Malad, Mumbai, has been fully renovated and is now operational, featuring premium product offerings and enhanced customer experiences," added Mishra.

Stock down 30% from recent peak

After a steady upward trajectory that propelled the stock to a fresh all-time high of ₹943 in September 2024, the stock has since experienced profit-booking. At current levels, the stock is down 30% from that peak.

Between May 2020 and August 2023, the stock saw a remarkable one-way rally, delivering a massive gain of 464%.

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