Shoppers Stop posts Rs 6 cr profit as beauty sales grows

Shoppers Stop returned to black in the July-September quarter, supported by tighter inventory management, higher premium spending and strong beauty sales, even as reported same-store sales growth slowed amid a shift in the festive calendar.

The department store retailer reported consolidated net profit of Rs 6 crore, against a net loss of Rs 7 crore in the year-ago quarter. Consolidated gross retail turnover rose 7 per cent year-on-year to Rs 1,618 crore, while statutory revenue from operations increased 8.7 per cent to Rs 1,370 crore.

Operating EBITDA climbed 55.8 per cent to Rs 43 crore from Rs 27.6 crore, reflecting tighter operating controls and improved inventory efficiency. The company also reduced outright inventory by Rs 78 crore and net debt by Rs 82 crore, advancing its stated goal of becoming net-debt free.

Festive shift masks growth

Reported same-store sales growth (SSSG) moderated to 2 per cent, compared to 6 per cent in the preceding quarter and 9.4 per cent a year earlier. The slowdown was partly attributable to the festive calendar, which shifted key Durga Puja, Navratri and Diwali purchases into the September quarter. On a festive-adjusted like-for-like basis, sales growth stood at 7 per cent, indicating stronger underlying demand than the headline SSSG figure suggests.

The distinction is important for department store operators, whose quarterly performance is sensitive to the timing of festive purchases. However, the adjustment does not eliminate the broader challenge of uneven discretionary spending, particularly among middle-income consumers.

Shoppers Stop’s share price fell 5.4 per cent to Rs 363.15 following the results, reflecting market concerns over the reported slowdown.

Table: Shoppers Stop quarterly results

Note: Gross retail turnover and statutory revenue from operations are different accounting measures and should not be treated as interchangeable.

Premium sales lift ticket values

The department store business generated Rs 1,302 crore in sales, up 4 per cent year-on-year. On a festive-adjusted basis, like-for-like growth reached 7 per cent. Growth was accompanied by higher customer spending per transaction. The average selling price rose 9 per cent to Rs 1,903, while average transaction value increased 8 per cent to Rs 5,527. Items per transaction remained unchanged at 2.9.

The figures suggest that higher price realisation, rather than an increase in the number of items purchased, supported sales growth. This places greater importance on premium merchandise, brand mix and full-price selling as retailers seek to protect margins in a price-sensitive market.

Premium brands accounted for 73 per cent of department store sales, with the contribution reportedly expanding by 390 basis points year-on-year. Shoppers Stop also reduced inventory in its private apparel labels by 26 per cent, while increasing selected higher-priced offerings, including its Bandeya ethnicwear range and Fratini Girl collection.

Beauty leads growth

Beauty remained the strongest growth category. Dedicated beauty retail sales rose 18 per cent to Rs 367 crore, with fragrance demand increasing 35 per cent. Global SS Beauty Brands, the company's distribution business, recorded quarterly sales of Rs 168 crore, up 59 per cent and its highest quarterly level to date. The performance highlights the contribution of prestige beauty and fragrance to the retailer's wider portfolio.

Shoppers Stop continued to expand its luxury beauty presence through dedicated boutiques for fragrance brand CREED in New Delhi and Japanese skincare label Shiseido in Bengaluru. It also undertook a nationwide Versace Crystal Emerald activation across 400 touchpoints.

The company has been consolidating its digital operations by integrating the standalone SSBeauty.in portal into its primary online storefront. This move helped reduce operating losses associated with the digital business by ₹8 crore during the quarter, according to the supplied figures.

Loyalty drives repeat sales

Customer retention remains central to Shoppers Stop's strategy. Its First Citizen programme has 14 million registered members, who contributed 84 per cent of overall sales during the quarter.

The premium Black Card segment added 40,000 members, with enrolments rising 24 per cent year-on-year. Black Card customers recorded a 66 per cent repeat-purchase rate and contributed 22 per cent of total retail sales.

A co-branded credit card partnership with RBL Bank adds reward points, airport lounge access and dedicated personal shopping facilities to the loyalty proposition. The strategy is designed to encourage repeat spending among high-value customers rather than relying exclusively on costly customer acquisition.

Expansion stays measured

Shoppers Stop spent Rs 39 crore on capital expenditure during the quarter, opening four department stores, two beauty boutiques and one MAC shop-in-shop. First-half additions reached 15 outlets, with capital expenditure of Rs 83 crore.

Its value-fashion format, INTUNE, generated Rs 72 crore in revenue and recorded 6 per cent festive-adjusted like-for-like growth. Inventory reductions of Rs 33 crore in the format also supported working capital discipline.

Despite the operating improvement, financial pressures remain. Finance costs stood at Rs 74.7 crore, leaving limited room for error as the retailer navigates the post-festive period. Rising occupancy costs and competition across apparel and beauty could further constrain profitability.

The next phase of the turnaround will depend on sustaining sales growth without excessive discounting, maintaining inventory productivity and converting working capital savings into durable cash-flow improvement. Achieving net-debt-free status will be a key test of whether the latest quarter marks a sustained recovery rather than a temporary improvement.