Shoppers Stop (SHOPERSTOP) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 sales/revenue reached INR 1,260 crore (Rs 1,260 Cr), up 2% year-over-year, despite subdued demand from fewer wedding dates, prolonged election season, and heatwave impacts.

• Premiumization strategy drove growth, with premium brands contributing 57% to sales, and premium plus portfolio grew 10% like-for-like.

• INTUNE and Beauty verticals/segments remained EBITDA positive, with 11 new stores opened in Q1 and accelerated expansion plans.

• First Citizen loyalty program surpassed 10 million members, contributing 80% of sales; Black Card customers at 14%.

• Standalone and consolidated unaudited financial results for Q1 FY25 were approved and released following a board meeting on July 18, 2024.

Financial highlights

• Gross margins remained largely flat year-over-year, with GAAP gross margin at 40.6%, down 170 bps; private brand trading margins improved by 1 percentage point but offset by mix.

• Non-GAAP EBITDA dropped 74% year-over-year to Rs 15 Cr; GAAP EBITDA fell 19% to Rs 146 Cr; Q1 EBITDA margin around 1%.

• Net loss for Q1 FY25 was Rs 22.72 Cr (consolidated), compared to a net profit of Rs 14.49 Cr in Q1 FY24.

• Operating expenses rose 14% year-over-year, mainly from new stores, higher rent, and tech investments.

• Working capital reduced by INR 20 crore, with private brand inventory down INR 65 crore year-over-year.

Outlook and guidance

• Expecting gradual demand recovery, with stronger performance anticipated in H2 FY25 due to festive and wedding seasons.

• Guidance for 12%-15% growth in beauty segment and double-digit overall business growth over the next two years.

• CapEx planned at INR 225-250 crore for FY25, with up to INR 100 crore borrowing expected this fiscal.

• Store expansion guidance: 75+ INTUNE stores and 11 departmental stores (gross) in FY25.

• Focus on premiumization, expanding INTUNE and Beauty segments, and cost rationalization to improve margins.