Shoppers Stop Limited — Q1 FY26 earnings call

Call held 18 Jul 2025

Management summary

Shoppers Stop reported a resilient Q1 FY26 performance, with strong growth in sales and EBITDA, particularly in departmental stores and the Beauty segment. Despite challenges in value fashion and continued losses in INTUNE, the company is optimistic about its premiumization strategy, store expansion plans, and operational efficiencies. Key metrics like customer entry and ATV showed positive trends, and significant inventory reduction was achieved.

Highlights

  • Non-GAAP sales increased by 6% YoY, with departmental stores achieving 5% LFL growth.

  • EBITDA grew significantly by 68% YoY, driven by a 145% increase in departmental store EBITDA.

  • Beauty business delivered a 17% growth on a consolidated basis, with Global SS Beauty sales doubling to INR 84 crores.

  • Customer entry on a like-for-like basis improved by 2 percentage points, and Average Transaction Value (ATV) increased by 6%.

  • INTUNE business doubled this quarter, though losses are expected to continue in the near future.

  • Company plans to open 7-8 departmental stores and 30-40 INTUNE stores in FY26.

  • Inventory reduction of INR 110 crores achieved from March 2025, with further working capital reduction expected.

  • Personal shoppers now contribute 25% of total sales, up 700 bps YoY, with an average transaction value of INR 15,500.

Concerns

  • Challenges in INTUNE value fashion segment

Key financials

  1. Sales (Non-GAAP) — +6%YoY
  2. EBITDA — +68%YoY
  3. SSG (Overall Business) 3%
  4. ATV Growth 6%
  5. ASP Growth 3%
  6. IPT Growth 3%

What they filed

Q1 FY27: revenue up 8.3%, net profit up 5.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,068 1,311 1,022 1,094 1,175 +10%1,321 +1%1,117 +9%1,185 +8%
EBITDA147 240 169 166 164 +12%210 −12%178 +5%180 +8%
Net profit-22 49 2 -18 -23 −5%13 −73%-18 −1000%-17 +6%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Departmental Stores
    5% LFL Sales Growth6% Overall Sales Growth145% EBITDA Growth3% EBITDA Margin2% LFL Customer Entry Growth
  • Beauty Business (Consolidated)
    17% Sales Growth
  • Global SS Beauty
    ₹84 Cr Sales₹130 Cr GMV100% Sales Growth
  • Private Brands
    3% Sales Growth100% Profits & Contribution Growth
  • INTUNE
    100% Business Growth

Guidance & targets

Store Openings

  • Departmental Stores Store Openings · FY26 · High confidence 7-8 stores
    On the departmental stores, we are planning to open between 7 and 8 stores.

    — Karunakaran M, Customer Care Associate, Chief Financial Officer

  • INTUNE Stores Store Openings · FY26 · High confidence 30-40 stores
    On the INTUNE, we would open anywhere between 30 to 40 stores.

    — Karunakaran M, Customer Care Associate, Chief Financial Officer

  • Departmental Stores Store Openings · Q2 FY26 · High confidence 4 stores
    For the coming quarter, we are investing and we are looking at opening 4 departmental stores

    — Kavindra Mishra, Customer Care Associate, Managing Director and Chief Executive Officer

  • INTUNE Stores Store Openings · Q2 FY26 · High confidence 7-8 stores
    and anywhere between 7 to 8 INTUNE stores.

    — Kavindra Mishra, Customer Care Associate, Managing Director and Chief Executive Officer

  • Beauty Stores Store Openings · FY26 · High confidence 2-3 stores
    Beauty, 2 to 3 stores we should be able to open this year.

    — Karunakaran M, Customer Care Associate, Chief Financial Officer

Working Capital

  • Inventory Reduction Working Capital · from March 2025 · High confidence INR 110 crores
    our outright inventory reduction we have been able to reduce our outright inventory by INR110 crores from March 2025, and we expect to reduce the working capital further.

    — Kavindra Mishra, Customer Care Associate, Managing Director and Chief Executive Officer

Store Strategy

  • New Departmental Store Size Store Strategy · Ongoing · High confidence 35,000 to 40,000 square feet

    Previously 15,000-30,000 square feet → 35,000 to 40,000 square feet

    Definitely, we are now looking at larger stores, Ankit... 35,000 to 40,000 square feet stores. And we have changed our thoughts from that 15,000, 20,000 or 25,000, 30,000.

    — Kavindra Mishra, Customer Care Associate, Managing Director and Chief Executive Officer

Profitability

  • INTUNE Full Price Sell-Through Profitability · Ongoing · Medium confidence north of 60%
    Full price sell-through... is significantly improving season on season... So comfortably north of 60%, right?

    — Kavindra Mishra, Customer Care Associate, Managing Director and Chief Executive Officer

  • EBITDA Margins (Departmental Stores) Profitability · Q2, Q3, Q4 FY26 · High confidence higher in Q2 and Q4
    And the margin, when the sale goes up, disproportionately goes higher in Q3 -- Q2 and Q4.

    — Karunakaran M, Customer Care Associate, Chief Financial Officer

Risks & concerns

  • Challenges in INTUNE value fashion segment

    high

    INTUNE is facing slower growth, intensified by deep discounts from competitors in June, leading to expected continued losses.

    Management acknowledged

  • Sporadic impact on consumer discretionary consumption

    medium

    Observed mixed trends in the retail industry due to external events affecting consumer spending.

    Management acknowledged

  • Increased depreciation and interest expenses (GAAP)

    medium

    Additional INR 17 crores in D&A and interest due to large store openings, which will continue for the next few years.

    Management acknowledged

  • Underperformance of Travel and Luggage category

    low

    This category experienced a significant 30-40% degrowth in the quarter, contrasting with other well-performing categories.

    Management acknowledged

Areas of evasion (2)

  • quantifying INTUNE losses
  • industry benchmarks for INTUNE repeat customer rates

Q&A highlights

2 direct
INTUNE performance and profitability Partial
INTUNE has had a soft performance in quarter 1. If I were to break into this break down this performance, April and May started off really well, but in June, as Kavi mentioned in his commentary also, a lot of the value fashion players started doing discounting... But yes, the losses have increased versus last year, Sameer.

Analysts pressed for quantification of INTUNE losses, but management only confirmed increased losses and attributed soft performance to competitive discounting and a delayed EOSS strategy.

Asked by Sameer Gupta

High discounting in INTUNE and its impact on margins Direct
the strategic direction behind offering of 40% off on the entire store is to front-end the sales discount of the month... discount remaining where it is, is also being funded by a conscious increase in intake margin. Therefore, the overall margin delivery is not suffering on account of any EOSS strategy.

Management explained the rationale behind aggressive discounting in INTUNE, asserting that it's a strategic move to front-end sales and is offset by higher intake margins, thus not impacting overall margin delivery.

Asked by Ankit Kedia

Impact of Black Card membership on gross margins Direct
The bonus points doesn't impact the gross margin. It is included as the marketing expense. But there will be an additional cost for the Black Card customers on the sales. It's something similar to customer acquisition costs.

Clarified that Black Card loyalty points are treated as marketing expense, not impacting gross margins, and that Black Card customers drive significantly higher transaction values, making them highly profitable despite associated costs.

Asked by Jignesh Kamani

3 min read 6 chapters

Detailed narrative

Strong Departmental Store Performance and Premiumization Drive

Shoppers Stop's departmental store format delivered a robust performance in Q1 FY26, with like-for-like sales growing by 5% and overall sales by 6%. This was underpinned by a 2% increase in like-for-like customer entry and a 6% rise in Average Transaction Value (ATV). The segment's EBITDA grew significantly by 145%, with EBITDA margins confirmed to be around 3% for the quarter. The company's premiumization strategy has led to 67% of sales from premium products, which saw a 9% like-to-like increase.

Beauty Segment and Global SS Beauty Outperformance

The Beauty business continued its strong trajectory, achieving a 17% growth on a consolidated basis. Within this, fragrances grew by 7%. Global SS Beauty, a wholly-owned subsidiary, doubled its sales, recording INR 84 crores in sales and INR 130 crores in GMV for the quarter. Management expressed high confidence in Global SS Beauty's continued market leadership and plans to open 2-3 new Beauty stores this fiscal year, focusing on mall locations and increasing MAC SIS within departmental stores.

INTUNE's Growth Amidst Value Fashion Challenges

The INTUNE value fashion format doubled its business in Q1 FY26, demonstrating significant growth from a lower base. However, the segment faced a 'soft performance' due to competitive deep discounting in June and a conscious decision to delay its End-of-Season Sale (EOSS) until July. Management anticipates that losses in INTUNE will continue in the near future as they invest in new shopping elements and supply chain efficiencies. The company aims for INTUNE stores to achieve benchmark sales productivity of north of INR 12,000 per square foot.

Strategic Store Expansion and Inventory Management

Shoppers Stop has outlined aggressive expansion plans for FY26, targeting 7-8 new departmental stores and 30-40 new INTUNE stores. For the upcoming quarter (Q2 FY26), 4 departmental stores and 7-8 INTUNE stores are planned. The strategy for new departmental stores has shifted towards larger formats, now targeting 35,000-40,000 square feet, up from previous smaller sizes. The company also successfully reduced its outright inventory by INR 110 crores from March 2025, with further working capital reductions expected.

Customer Loyalty and Engagement Initiatives

Customer loyalty programs, particularly 'First Citizen', played a crucial role, contributing 85% of total revenue. The company saw strong enrollment, adding 195,000 new Silver members and 16,000 new Black Card members, alongside 15,000 Black Card renewals—the highest ever. Personal shoppers now contribute 25% of total sales, an increase of 700 basis points year-over-year, with an average transaction value of INR 15,500. Marketing campaigns like 'India Weds with Shoppers Stop' generated INR 154 crores in sales, and 'Travel Edit' added INR 20 crores.

Operational Efficiency and Margin Improvement

Operational expenses, excluding INTUNE and new stores, declined by 2 percentage points compared to last year, reflecting a focus on streamlining costs and maximizing efficiencies. The company noted that the overall EBITDA numbers increased by 68% on a non-GAAP basis, and profit before tax losses significantly reduced compared to last year. Management expects margins to be disproportionately higher in Q2 and Q4, which are typically stronger quarters for sales.

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