Shoppers Stop shares tank 10% after multiple headwinds dent Q3 results

Shares of Shoppers Stop fell as much as 10% in early trading on Wednesday, January 21, in response to a weak quarterly performance in the October-December period.

Revenue for the quarter grew only 2.6% during the quarter to ₹1,415 crore from ₹1,379.5 crore in the same quarter last year.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) declined 11% year-on-year to ₹217.9 crore, while margins narrowed by 240 basis points to 15.4% from 17.8% last year.

Net profit for the quarter fell nearly 70% to ₹16.12 crore. An exceptional loss of ₹17.69 crore also impacted the company's profitability.

The management said in its earnings commentary that the consumption environment remains challenging with business during the quarter getting impacted by a shift in the festive season, uneven discretionary demand and elevated pollution levels in the National Capital Territory Region (NCR).

Premium brands contributed to 69% of Shoppers Stop's total sales during the quarter, growing by 6% from last year, while the beauty segment grew by 14% to ₹395 crore. INTUNE sales grew 22% from the year-ago period to ₹77 crore.

Nine analysts have coverage on Shoppers Stop, of which five of them have a "buy" rating, while two each have a "hold" and "sell" rating respectively.

Shares of Shoppers Stop fell 8% in early trading on Wednesday to ₹335. The stock is down 46% over the last 12 months.