Shoppers Stop (SHOPERSTOP) Q4 07/08 earnings summary

Executive summary

• FY08 gross retail turnover rose 34% to Rs 12,069.1m; net profit fell sharply as new-store and format costs, rent-related service tax, interest and depreciation pressured margins.

• Expansion reached 24 department stores in 12 cities, alongside growth in specialty, food and beverage, airport and multichannel formats.

Financial highlights

• Standalone total revenue was Rs 11,602.43m, up 33% YoY; profit after tax was Rs 69.67m vs Rs 261.95m in FY07.

• Consolidated net profit was Rs 26.48m vs Rs 243.38m; consolidated basic EPS was Rs 0.76 vs Rs 7.00.

• Gross margin rose to 32.0% from 31.4%; gross retail turnover grew 34.2%, while like-for-like sales grew 14.0%.

• Standalone EBITDA fell to Rs 650m from Rs 787m; operating and administrative expenses increased to Rs 2,634.17m from Rs 1,680.38m.

• Proposed dividend remained Rs 1.50 per share; total payout including dividend distribution tax was Rs 61.17m.

Outlook and guidance

• Plan to expand department stores to 41 over the next three years and continue growing other retail formats.

• Gateway Multichannel planned to launch its transactional website in Q2 FY09; a broader online retail portal was also under development.

• Management cited organized retail growth, rising consumption and consumer aspirations as growth opportunities; no quantified earnings guidance was stated.