Lifestyle retailer Shoppers Stop Ltd. posted a loss for the third straight quarter, falling short of analyst estimates as it sold grocery retail chain Hypercity and exited its duty-free airport retail business.
Net loss of the Raheja Group promoted company stood at Rs 21.8 crore in the July-September quarter compared to a profit of Rs 10.69 crore in the year ago period, it said in a stock exchange filing today. Analyst tracked by Bloomberg had forecast a profit of Rs 8.77 crore.
The hit to the bottomline was on account of a one-time loss of Rs 33.79 crore for the sale of Hypercity and for its exit from the company’s joint venture with Swiss firm Nuance Group India Pvt Ltd. that operated duty free stores. Earlier this month, Shoppers Stop sold its share in grocery retail chain Hypercity to Kishore Biyani’s Future Group for Rs 655 crore.
Revenue in the September ended quarter declined 12 percent to Rs 838 crore year-on-year as the Goods and Services Tax rollout hit the company’s supplies.
Q2 was relatively subdued owing to stock and supply changes on account of GST implementation. However, the teething issues have been resolved and we are well on track for a strong festive quarter.Govind Shrikhande, Customer Care Associate & MD, Shoppers Stop
The decline in revenues came as same-store sales growth for Shopper’s Stop decreased by 5.5 percent, according to the company’s investor presentation. The chain also saw footfalls drop 17.5 percent.
The operating performance, however, was robust on account of lower expenses. Earnings before interest, taxes, depreciation and amortisation rose to 5.9 percent to Rs 50.6 crore from the same quarter last year. The operating margin expanded 10 basis points to 6 percent in the same period.
During the quarter, the company also sold 5 percent in its namesake lifestyle and fashion arm to Amazon.com. Shares of Shopper Stop dropped 3.58 percent to Rs 508.50 on the benchmark indices after the announcement of the results.