Shoppers Stop (SHOPERSTOP) Q3 25/26 earnings summary

Executive summary

• Q3 FY26 saw flat to slightly higher sales in core business, with consolidated sales up 4% YoY to ₹1,721 Cr, reflecting resilience amid muted consumer sentiment, environmental disruptions, and an early festive season shift.

• Premiumization efforts continued, with premium and premium-plus mix rising to 69%, and beauty sales up 14% YoY; non-apparel categories and digital engagement also gained share.

• Customer entries grew 5%, new customer acquisition was strong at 40%, and loyalty program sales reached 84%, with First Citizen Club membership exceeding 13.3M.

• EBITDA before one-off costs dropped 24-34% YoY due to higher investments in customer acquisition, marketing, technology, and new labor code provisions.

• Store network expanded to 301 stores across 71 cities, including new and relaunched flagship stores.

Financial highlights

• Sales remained flat for the quarter, with like-for-like sales declining in October, growing in November, and flat in December; consolidated revenue for Q3 FY26 was ₹1,415.82 crore.

• Beauty sales grew 14%, driven by fragrances and strong distribution business performance; distribution business revenue reached ₹122 Cr in Q3, up 58% YoY.

• Intune value format delivered 22% YoY sales growth, but overall losses for the year are expected at ₹60 Cr, reducing to ₹20-25 Cr in FY27.

• Gross margin contracted by 70-111 bps YoY, mainly due to earlier end-of-season sales and higher provisions in private brands.

• Standalone and consolidated net profit for Q3 FY26 were ₹12.61 Cr and ₹16.12 Cr, respectively, impacted by a one-time exceptional charge from new labour codes.

Outlook and guidance

• Expecting mid-teen (12-15%) revenue growth for FY27, with Q1 FY27 seen as an inflection point for Intune profitability.

• Q4 and FY26 sales growth expected in single digits, with EBITDA margins in low single digits.

• Lower inflation is expected to gradually improve consumer sentiment and support demand recovery.

• Management confident of a turnaround over the next two quarters, driven by fresh inventory, improved conversion, and continued premiumization.

• The impact of new labour codes will be further evaluated and accounted for as related rules are notified.