SHOPERSTOP - Shoppers Stop Ltd Share Price

Shoppers Stop management presented a positive outlook in their earnings conference call for Q1 FY26, reflecting confidence driven by vibrant market conditions and strategic initiatives. They highlighted a flat overall customer entry, with a 2% improvement on a like-for-like basis. The Average Transaction Value (ATV) rose by 6% for the quarter, solidifying a post-COVID CAGR of 8% over the last 20 quarters, propelled by substantial increases in Average Selling Price (ASP) and Items Per Transaction (IPT), both rising by 3%.

Financial metrics showed non-GAAP sales growth of 6%, alongside a 68% increase in EBITDA. The departmental stores recorded a 5% like-for-like growth rate, resulting in a remarkable EBITDA growth of 145%. The Beauty segment excelled with a 17% increase in consolidated sales.

Management's strategic focus remains on premiumization, evidenced by a 67% increase in premium product sales and a 9% rise in year-over-year growth for premium categories. The successful "India Weds with Shoppers Stop" campaign enrolled 58,000 customers, generating sales of INR 154 crores, while the "Travel Edit" initiative yielded additional sales of INR 20 crores.

Going forward, Shoppers Stop plans to expand its store count significantly, targeting the opening of 7 to 8 departmental stores and 30 to 40 INTUNE stores in the fiscal year. The early monsoon signals promising retail growth, and management anticipates improved consumer spending as the festive season approaches. Adjustments in operational expenses have positioned the company for enhanced profitability, enabling ongoing investments in growth initiatives. The optimism regarding anticipated market conditions suggests a robust developmental trajectory for Shoppers Stop in the near term.

Here are the major questions and answers from the Q&A section of the Shoppers Stop Q1 FY26 earnings call transcript:

1. Question: Vishal Dudhwala: Given the rising contribution of private label and exclusive brands, how are you balancing scale and margin improvement? Answer: "We focus on two aspects: exclusivity and GMROI. We want our private brands to fill gaps left by national brands while delivering higher margins. Over the past 18 months, we've rationalized some private brands to drive productivity and focus on women's and kids' wear to ensure profitability."

2. Question: Vishal Dudhwala: With omnichannel sales growing, what steps are you taking to integrate inventory between online and physical stores? Answer: "We are relaunching our app and website to improve the omnichannel experience. In the next 20 days, we expect to have better inventory integration, allowing real-time visibility across platforms, essential for us to be a true omnichannel premium player."

3. Question: Sameer Gupta: Can you elaborate on the underperformance of INTUNE stores? Answer: "In Q1, while April and May were promising, June faced challenges due to heavy discounting by competitors. Our end-of-season sale began later, which affected demand. While some stores are benchmark performers, we aim to replicate that success throughout our network."

4. Question: Sameer Gupta: Can you share the store-level EBITDA losses for INTUNE in FY'25? Answer: "While we don't disclose specific figures publicly, losses have increased as expected due to ongoing investments in new INTUNE stores. As we build the business, these losses are a planned part of our growth strategy."

5. Question: Ankit Kedia: How is customer footfall moving? Have you gained market share? Answer: "We've seen a 2% increase in customer entries in like-for-like stores. Overall, our departmental stores achieved a 5% growth, aided by strong performance in May and June, reflecting an optimistic demand environment and improved operational KPIs."

6. Question: Jignesh Kamani: How is inventory turnover and full-price sell-through for INTUNE? Answer: "SSG for INTUNE has been soft, but we saw significant improvements in inventory turnover, allowing us not to pre-pone our EOSS. Currently, our full-price sell-through is over 60%, ahead of internal targets, indicating strong product acceptance."

7. Question: Shalini Gupta: What are your expansion plans going forward? Answer: "We plan to open 7 to 8 departmental stores and 30 to 40 INTUNE stores this fiscal year. This includes 4 stores already opened, with additional openings in the next quarters, focusing on both growth and strategic locations."

8. Question: Percy Panthaki: What initiatives helped achieve 5% SSG? Answer: "While macro conditions improved, our campaigns like India Weds and Travel Edit drove new customer entries. More personal shoppers have also increased customer engagement, contributing to our overall sales growth."

These answers summarize the discussions from the earnings call while retaining key information such as performance metrics and future outlooks.