Shoppers Stop Q1 FY27 earnings call

Shoppers Stop Limited reported a strong Q1 FY27, with consolidated top-line revenue growing by 10% year-on-year. This growth translated into a significant 40% increase in EBITDA. Notably, the company achieved a positive PAT of Rs 5 crores, a turnaround from a loss of Rs 4 crores in Q1 FY26. Excluding a one-off^📎 gain of Rs 5 crores in Q1 FY26, the loss reduction was Rs 7 crores year-on-year.

The company's premiumization strategy is gaining traction, with the premium portfolio contributing 72% of in-store sales, an improvement of 490 basis points. Average Transaction Value (ATV) increased by 10% to Rs 5,704. Shoppers Stop is set to launch two exclusive Swiss watch brands in Q2, priced between Rs 1 lakh and Rs 1.5 lakhs, further solidifying its premium positioning.

The overall Beauty business, including Global SS Beauty, delivered Rs 327 crores in revenue, marking a healthy 15% year-on-year growth, primarily driven by fragrances (34% growth). The Beauty distribution business (GSSBB) demonstrated robust growth, with revenue of Rs 129 crores and a 53% year-on-year increase, achieving a GMV of Rs 200 crores. Management plans to invest approximately Rs 40 crores in this segment this year, which currently yields healthy ROCEs of 16-17%.

The INTUNE business showed initial signs of turnaround, reporting revenue of Rs 82 crores, a 21% year-on-year growth. Crucially, its like-for-like (LFL) growth was 10% after four consecutive quarters of decline. Inventory was optimized, reducing by Rs 34 crores year-on-year and Rs 11 crores versus March '26, achieving an optimal 13-week cover. Management expects substantial loss reduction from Q2 onwards and may consider opening 5-10 new INTUNE stores in Q4 FY27.

Shoppers Stop is actively implementing space productivity initiatives, converting non-value-adding areas (e.g., menswear private brands, small home sections) into spaces for national brands, expecting to double productivity. These initiatives, along with IOT integration for stores and smarter CRM, are projected to increase LFL growth by 3-4% and show benefits in H2. The company is also leveraging AI for revenue generation (personalization, camera vision) and cost mitigation (back-end systems, demand forecasting).

The company opened 8 new stores in Q1 (2 departmental, 4 Beauty, 2 INTUNE, 2 M.A.C shop-in-shops), bringing the year-to-date departmental store openings to 3. Shoppers Stop remains firmly on track to achieve its goal of becoming debt-free by the end of FY27, with internal accruals deemed sufficient to fund ongoing expansion plans of 9-10 departmental stores annually.

While the gross margin percentage for Q1 FY27 was 6% (up from 4.7% last year), management clarified that the premiumization strategy might lead to a lower percentage margin but higher rupee throughput. The focus is on overall EBITDA flow and productivity gains, which are expected to compensate for any percentage-point shifts in gross margin.