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Trent, a subsidiary of the Tata Group, saw its shares decline sharply by 9.2% on the Bombay Stock Exchange (BSE) despite reporting a robust 46% year-on-year (YoY) jump in its Q2 profit after tax (PAT) to Rs 423.44 crore. This figure surpassed ET Now's poll estimate of Rs 414 crore, indicating positive performance. However, the company's revenue growth, while impressive at 39.6% YoY, came in below expectations at Rs 4,035.56 crore, missing the estimated Rs 4,320 crore. Despite a subdued consumer market, Trent attributed its encouraging results to strategic initiatives focusing on product offerings, its store portfolio, and its operational supply chain.
The fashion segment of Trent witnessed double-digit like-for-like growth in Q2FY25. Notably, emerging categories like beauty & personal care, innerwear, and footwear continue to gain traction among customers, contributing over 20% of Trent's total revenues. As of September-end, the company's store portfolio boasted 226 Westside stores, 577 Zudio stores, and 28 stores across other lifestyle concepts. During the quarter, Trent expanded its retail presence by opening 7 Westside stores and 34 Zudio stores (including one in Dubai) across 27 cities. Additionally, the company consolidated 9 Westside and 16 Zudio stores.
Trent highlighted that the change in its revenue profile across its various concepts aligns with its strategic objectives and plans. The gross margin profile of both Westside and Zudio remained consistent, contributing to an overall operating EBIT margin of 10.8% for Q2FY25, a slight increase from 9.8% in Q2FY24. The Star business, comprising 74 stores, including the addition of 2 stores during the quarter (bringing the total to 8 in H1FY25), recorded a 27% increase in operating revenue in Q2FY25, with like-for-like growth exceeding 14%. The business continued to benefit from improved operating performance driven by its own brands, staples, fresh products, and general merchandise offerings, which now account for over 73% of its revenues.
Source: Trent shares crack 9% despite 46% YoY jump in Q2 PAT