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Retailers grow sales but battle with profits in June quarter

Sales might decline in the second quarter due to the advancing of discounts

Raghavendra Kamath  |  Mumbai 

Retail

Listed have struggled with their bottom line in the first quarter despite rising sales, as discounts were advanced to clear stocks before the goods and services (GST) was introduced.

Revenues of top retail firms grew an average 23 per cent, year-on-year, in April-June. But except for Future Retail, and Trent, other retail posted losses during the quarter.

Aditya Birla Fashion & Retail posted revenue growth of 25 per cent during the quarter but a loss of Rs 20 crore. Shoppers Stop posted sales growth of 22 per cent but a loss of Rs 4 crore.

Abneesh Roy, senior vice-president, institutional equities, Edelweiss Securities, said sales might decline in the second quarter due to the advancing of discounts. A K Prabhakar, head of research, IDBI Capital, said, “have cleared stocks with discounts before the GST, which seems to have affected their bottom line.”

Profit before interest, and depreciation margins of showed a mixed trend. Future Retail, Avenue and posted improvements but Shoppers Stop and Aditya Birla Fashion posted declines.

Same-store sales growth of the top retail grew by an average 16.2 per cent during the quarter, one of the best performances in the last several quarters. Shoppers Stop posted 19.8 per cent same-store sales growth during the quarter while Future Retail’s Big Bazaar posted 15.9 per cent, one of the best for the chain.

Future Retail’s net profit more than doubled to Rs 147.85 crore while its revenue rose 18.22 per cent to Rs 4,704.93 crore during the quarter.

retailers

First Published: Mon, August 21 2017. 02:53 IST
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