Shoppers Stop spurts after turnaround Q1 outcome

Shoppers Stop rallied 6.25% to Rs 575.55 after the company reported a consolidated net profit of Rs 22.83 crore in Q1 FY23 compared with net loss of Rs 104.89 crore in Q1 FY22.

Consolidated net sales surged 362.1% to Rs 948.44 crore in Q1 June 2022 from Rs 205.23 crore recorded in Q1 FY22.

The company said that the momentum continued from March 2022 as the industry witnessed the first disruption-free quarter.

The company's pre-tax profit stood at Rs 32.37 crore in Q1 FY23 as against a pre-tax loss of Rs 139.45 crore in the corresponding quarter previous year. Total expenses spiked 125.36% to Rs 921.63 crore in Q1 FY23 over Q1 FY22.

The company's Private Brands revenue grew 387% year on year (YoY), beauty segment revenue surged by 321% YoY and E-commerce sales continued to grow, by 29% YoY.

The Average Selling Price (ASP) has improved by 15% YoY and the Average Transaction Value (ATV) by 7% YoY in Q1FY23. GAAP EBITDA for the quarter stood at Rs 168 crore as compared to Rs 1 crore in Q1 FY22. The company reported GAAP gross margin of Rs 397 crore in Q1 FY23, steeply higher than Rs 78 crore recorded in Q1 FY22.

Meanwhile, the company said that it continued to remain debt free and opened six new stores during the quarter.

Venu Nair, MD & CEO at Shoppers Stop, said, "The strong growth momentum, seen March 22, persisted through first quarter of FY23 and continuing in July. We recorded a strong quarterly performance, and believe that the growth will continue in the coming quarters due to easing of Covid related restrictions. This, coupled with the upcoming festive season, is likely to release a significant pent-up demand and further aid the Company's revenue growth."

He added, "All our product categories and channels have witnessed a surge during the quarter. Consumer sentiments have improved with the economy reopening which has led to an increase in footfalls. Our digital sales base remained intact in spite of our robust offline performance. We expect good demand in tier-2 cities and beyond, with the rise in smartphone penetration, and the growing adoption of digital payment systems. We plan to launch new stores primarily in tier-2 and tier-3 cities while sustaining our investments in store renovations, during the year."

Shoppers Stop said it expect FY23 to be one of the strongest year for the retail industry. Returning mobility and higher ticket purchases led by the pent-up demand will likely drive retail spending over the coming months. The hybrid work culture and the festive season will provide excellent growth opportunities for categories like beauty, formal wear, and Indian wear. The company believes that digital channels will continue to witness higher growth, and Shoppers Stop will lead the change with its customer-friendly digital platforms that provide a smooth shopping experience. The retail industry is poised on a growth trajectory this fiscal year, and we remain optimistic about delivering a sustainable long-term growth, creating value for all stakeholders.

Shoppers Stop is the nation's leading premier retailer of fashion and beauty brands.

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