Shoppers Stop’s Q3FY16 profits fall by 19 per cent

Shoppers Stop has reported a fall in profits for the third quarter by 19 per cent to Rs 11.39 crores from Rs 14.05 crores in the same period last year. The company cited the reason as the hypermarket chain HyperCITY Retail. However, its standalone net profit rose 71.31 per cent to Rs 23.59 crores in the three months ended December 31 from Rs 13.77 crores a year ago. Revenue increased by 18.98 per cent to Rs 915.31 crores from Rs 769.24 crores a year ago.

Govind Shrikhande, MD, Shoppers Stop, hopes to see a turnaround by the fiscal year 2018 as ‘we are going back to our earlier strategy of differential pricing and merchandise’. Experiments with discounting and selling at below the maximum retail price did not show much results and instead impacted margins.

The company’s total income from operations during the quarter under review was also up 19.06 per cent to Rs 911.75 crores as against Rs 765.79 crores in the corresponding quarter of the last fiscal. The third quarter is the peak festive shopping quarter and with Durga Puja in October last year, it turned out to be a blockbuster quarter. Shrikhande informed that the departmental store format saw a double digit growth of 18.2 per cent and a strong like-to-like growth of 17.4 per cent in second quarter of this fiscal.

Shoppers Stop is promoted by K Raheja Group and operates 76 stores in 36 cities. This quarter it added two Shoppers Stop stores in Jaipur and New Delhi, one HyperCity store in Noida, one MAC standalone store at Hyderabad, one Mothercare store in Jaipur and one Crossword store in Gurgaon. Also, it has expanded its membership base by adding 117,670 new members to the First Citizen Loyalty Programme in Q3FY16.