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Informist, Tuesday, Apr. 29, 2025

 

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--Trent Jan-Mar net profit INR 3.50 bln vs INR 6.54 bln year ago
--Analysts saw Trent Jan-Mar net profit INR 3.40 bln 
--Trent Jan-Mar revenue INR 41.06 bln vs INR 31.87 bln year ago 
--Trent to pay INR 5 per share dividend for FY25 
--Trent FY25 net profit INR 15.85 bln vs INR 14.36 bln year ago 
--Trent FY25 revenue INR 166.68 bln vs INR 119.27 bln year ago 
--Trent FY25 operating margin 11.10% vs 9.86% year ago 
--Trent: Added presence across 64 cities, towns in FY25 
--Trent: Comparative micro mkt growth for fashion portfolio was strong FY25 
--Trent Jan-Mar operating EBIT margin 9.3% vs 8.3% year ago 
--Trent: Gross margin profile of Westside, Zudio remains consistent 
--Trent: Online sales grew 43% in FY25, accounted for 6% of Westside revenue 
--Trent Jan-Mar operating EBIT INR 3.77 bln vs INR 2.61 bln year ago 
--Trent: Westside opened 13 stores in Jan-Mar 
--Trent: Zudio opened 132 stores in Jan-Mar 
--Trent: Westside total store count at 248 at end of Mar 31 
--Trent: Zudio total store count at 765 at end of Mar 31 
 

 

By Avishek Rakshit

 

KOLKATA – Rising income from the opening of new stores but tepid rise in same-store sales resulted in Trent Ltd. reporting its weakest growth in revenue in 16 quarters during Jan-Mar. However, the company's net profit was marginally better than what the Street had expected.

 

Trent reported 28.8% on-year growth in revenue from operations--the lowest growth since Apr-Jun of the financial year 2020-21 (Apr-Mar)--at INR 41.1 billion, missing the Street's projection of INR 42.8 billion. The net profit, which fell 46.5% on year to INR 3.5 billion, was slightly higher than the Street's expectation of INR 3.4 billion.

 

However, the net profit for the March quarter of FY24 had included an exceptional item of INR 5.4 billion arising from reassessment of gains from lease terms. Such an exceptional item, which inflates the profit, was absent in the March quarter of the previous financial year. At the pre-tax level, however, which includes taxes while discounting any exceptional gains made by the company, Trent's gross profit rose 43.6% on year to INR 4.5 billion during Jan-Mar of FY25.

 

The overall operating earnings before interest and tax margin during the quarter under review was 9.3%, as compared to 8.3% during Jan-Mar of FY24. The EBIT, at INR 3.8 billion, rose over 44% on year.

 

In a statement, the company said its like-for-like growth in the fashion portfolio was in the mid-single digit for the reporting quarter, but for the financial year ended Mar. 31, it was in double digits. The emerging categories, including beauty and personal care, innerwear, and footwear, continued to gain traction with customers and contributed to over 20% of Trent's revenue. Online sales grew 43% in FY25 and accounted for 6% of Westside's revenue. The gross margin profile of Westside and Zudio stores remained consistent.

 

However, the increased store count helped the company to boost its revenue. In FY25, the Tata Group company opened 40 Westside-branded and 244 Zudio-branded stores and consolidated 24 stores each under the two brands. This resulted in a total count of 248 Westside stores, 765 Zudio stores, and 30 stores in other lifestyle concepts. Effectively, in Jan-Mar, Westside opened 13 stores and Zudio opened 132.

 

The store openings also helped the company to enter new geographies and strengthen its presence in existing ones. In FY25, Trent added 64 cities and towns in the country, including tier-II and tier-III locations, to its list of addresses. As of Mar. 31, the company had a presence in 242 cities across India and the UAE, with 14.9 million square feet of retail area.

 

Trent said that while it continues to expand into semi-urban markets, it is also strengthening its presence in metropolitan and tier-I cities to increase the top line from key markets. The company said the quality of its stores portfolio is also evolving, and it is consciously increasing the density of its presence in the metros. While such a move leads to higher brand visibility and connection with the consumer, it also helps to boost sales from micro-markets. Trent said it would be appropriate for the company to pursue revenue growth across comparative micro markets vis-a-vis just the performance of comparative stores.

 

As a result, during FY25, the company's top line increased by nearly 40% to INR 166.7 billion. The net profit, taking into account the one-time gain in FY24, rose by over 10% to INR 15.9 billion. The company's operating margin for the reporting quarter was 11.1%, up from 9.9% in the year-ago period.

 

The board approved a dividend of INR 5 per share. Tuesday, shares of Trent closed 3.5% higher at INR 5,391.50 on the National Stock Exchange. The company released its earnings shortly before the market closed.  End
 

Edited by Rajeev Pai

 

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