Shoppers Stop Q2 Results Review

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Shoppers Stop Ltd.’s reported revenue of Rs 10 billion (up 60% YoY, 7% QoQ) and Ebitda of Rs 1.7 billion in Q2 FY23, which were above consensus estimates.

Ebitda margin at 16.6% was up 540 basis points YoY, but down 67 bps sequentially. Revenue recovery rate from Q2 FY20 (pre-Covid levels) continued its upward trajectory with 119% recovery in Q2 FY23 versus 113% QoQ.

Shoppers Stop added a single department store and a single beauty store, in net terms, during the quarter. This takes the total count to 91 department stores and 175 beauty stores, with plans to add nine and 11 stores (net) in the respective categories in H2 FY23.

Shoppers Stop is also targeting ~9% area addition in the course of FY23.

Under the new management, company is likely to improve its growth trajectory driven by accelerated small-size store expansions, growth in private-label mix, and increased focus on the high-growth beauty business, aided by improved consumer sentiment, in our view.

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