Avenue Supermarts Q3 Results: Revenue Rises As Customers Shopped More During Festive Season
Avenue Supermarts Ltd.’s quarterly revenue rose in line with estimates as customers shopped more during the festive months of October and November.
Revenue of the operator of the DMart chain of hypermarkets rose 11% year-on-year to Rs 7,542 crore in the quarter ended December, according to an exchange filing. That compares with the Rs 7,459.8-crore average estimate of analysts tracked by Bloomberg.
Operating profit rose 15% to Rs 689.12 crore.
Operating margin stood at 9.1% compared with 8.8% a year ago.
Net profit rose 16% year-on-year to Rs 447 crore compared with the estimate of Rs 423.5 crore.
“The quarter has seen further improvement in our business and financial metrics," Neville Noronha, CEO and MD of Avenue Supermarts was quoted as saying in the results release. "Our overall sales and sales mix is now trending very close to our usual times except for specific customer consumption changes post Covid-19.”
Segments taking a longer time to recover include apparel, laundry, footwear, travel and relevant out-of-home usage items.
Agile operating expenses management and a surge in festival shopping helped the company deliver a significantly better quarter than the previous two, Noronha said.
December, however, did not trend well for the hypermarket chain as the previous two months.
Of its 221 DMart stores, 162 that are older than two years or more did about 96% of sales compared with a year earlier in December, Noronha said. Restricted store operations in certain cities after Diwali due to night curfews and weekend closure led to significantly larger declines in such stores over a year earlier.
Customers continue to shop more efficiently as limited visits kept basket value higher. Still, the value has reduced compared with peak pandemic levels.
The DMart operator said it continues to face inconsistent supply from the sectors other than fast moving consumer goods. Availability in certain categories is likely to get worse before getting better and can impact sales mix and margins in the near term, Noronha said.
During the quarter, Avenue Supermarts soft-launched its online shopping option— DMart Ready.—in select pin codes of Ahmedabad, Bangalore and Hyderabad. The company will continue with small trials, reviews and controlled acceleration of online shopping.