Shoppers Stop (SHOPERSTOP) Q4 11/12 earnings summary

Executive summary

• FY12 gross retail turnover reached ₹2,192 crore, up 17%; like-for-like sales grew 7%, while standalone profit after tax fell to ₹64.26 crore from ₹75.18 crore amid a challenging economic environment and rapid store expansion.

• Expansion reached 51 department stores across 22 cities; loyalty members exceeded 2.5 million and contributed 72% of sales.

Financial highlights

• Standalone revenue was ₹194,786.90 lakh, up 16.91% YoY; profit before tax was ₹9,780.70 lakh versus ₹11,382.58 lakh, and PAT was ₹6,425.92 lakh versus ₹7,517.58 lakh.

• Standalone EBITDA was ₹14,391 lakh versus ₹15,211 lakh; operating profit before exceptional items declined 5%, while basic EPS was ₹7.80 versus ₹9.52.

• Consolidated revenue was ₹278,768.90 lakh versus ₹217,573.46 lakh; profit for the year was ₹1,901.43 lakh versus ₹4,319.57 lakh, and basic EPS was ₹2.31 versus ₹5.47.

• Standalone operating cash flow was ₹3,697.83 lakh versus ₹13,723.53 lakh; inventory rose to ₹21,204.01 lakh from ₹15,113.66 lakh.

Outlook and guidance

• Expansion plans called for a further growth phase over the next 36 months, with deeper penetration in existing markets and entry into new cities and Tier-II locations.

• Management expected a consumption recovery to benefit the established customer offer and geographic footprint; continued investment in HyperCITY, Crossword, Nuance and Timezone was intended to support future growth.

• Better sales mix from private labels and lifestyle products, vendor scale and shrinkage control were identified as potential supports for future gross margins.