Shoppers Stop Limited — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

Shoppers Stop delivered a strong Q2 FY26, marked by robust sales growth, a significant turnaround in profitability, and exceptional performance in its premium categories and distribution business. Despite a cautious consumer environment and planned losses in new ventures, the company's premiumization strategy and operational efficiencies are driving sustainable growth and market share gains, with a positive outlook for the festive Q3.

Highlights

  • Overall sales rose by 7% with departmental store like-for-likes at 9.4%, the highest in the last 10 years.

  • EBITDA grew by 42%, and Profit Before Tax turned positive from a loss of ₹12 crores to a profit of ₹9 crores, an improvement of ₹21 crores.

  • Beauty segment outperformed, growing 22% with fragrances leading the charge, while Watches and Handbags recorded strong double-digit growth of 13% and 11% respectively.

  • The premium product mix grew 16%, contributing a 375 basis points gain, and now accounts for 69% of total mix.

  • Global SSBeauty (GSSB) distribution business delivered outstanding performance, growing 103% year-on-year.

Concerns

  • Sluggish growth in certain discretionary categories and consumer goods, with urban consumers cautious due to inflationary concerns and geopolitical uncertainties.

  • New businesses INTUNE and ssbeauty.in are in an investment phase, incurring planned losses due to front-loaded investments in store openings, marketing, and backend infrastructure.

  • Delays in opening new departmental stores in Q2 due to approvals and other factors, though 9-10 net stores are still planned for the year.

  • The core beauty portfolio (ex-distribution) has seen moderation, with pressures at the masstige level and the overall segment being 'overheated'.

Key financials

  1. Overall Sales Growth — +7%YoY
  2. Departmental Store LFL Growth 9.4%
  3. EBITDA Growth — +42%YoY
  4. PBT (Loss to Profit) ₹9 Cr
  5. PBT Improvement ₹21 Cr
  6. Customer Entry LFL Growth 6%
  7. Average Transaction Value (ATV) Growth 8%
  8. Average Selling Price (ASP) Growth 6%
  9. Items Per Transaction (IPT) Growth 2%

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

  • Beauty
    22% Growth
  • Watches
    13% Growth
  • Handbags
    11% Growth
  • Premium Product Mix
    16% Growth69% Share of Total Mix375 bps Basis Points Gain
  • Global SSBeauty (GSSB) Distribution
    1% Growth
  • INTUNE
    — Like-for-like Growth

Capital allocation

medium confidence
  • Capex Capex disclosed
    • New departmental stores
    • INTUNE store openings
    For reasons beyond our control, opening of new departmental stores were delayed this quarter. We will be opening five departmental stores this quarter and four to five in Q4. On INTUNE, we had opened three stores in Q2, and we expect to open five stores in Q3. And we are planning to open between 8 to 10 stores in Q4.
  • Liquidity Liquidity disclosed Working capital reduced by ₹63 crores in Q2.
    Our working capital reduced by Rs. 63 crores in Q2.

Guidance & targets

Store Expansion

  • Departmental Store Openings Store Expansion · Q3 FY26 · High confidence 5 stores
    We will be opening five departmental stores this quarter and four to five in Q4.

    — Kavi

  • Departmental Store Openings Store Expansion · Q4 FY26 · High confidence 4-5 stores

    — Kavi

  • INTUNE Store Openings Store Expansion · Q3 FY26 · High confidence 5 stores
    On INTUNE, we had opened three stores in Q2, and we expect to open five stores in Q3. And we are planning to open between 8 to 10 stores in Q4.

    — Kavi

  • INTUNE Store Openings Store Expansion · Q4 FY26 · High confidence 8-10 stores

    — Kavi

  • Net Departmental Stores Store Expansion · FY26 · High confidence 9-10 stores
    Having said that, I think we will have between nine to ten stores between Q3 and Q4.

    — Kavi

Profitability

  • Core Business EBITDA Margin Profitability · Full Year FY26 · Medium confidence mid-single-digit or slightly better
    we should be able to see a mid-single-digit EBITDA margin or slightly better than mid-single-digit EBITDA margin for the core-business.

    — Karuna

  • INTUNE Store Level Breakeven Profitability · FY27 · Medium confidence very close to breakeven

    Previously breakeven in FY26 → very close to breakeven

    No, very unlikely it will happen. See I mean, while in the first half we have reported losses, in the second half, we are working on a number of initiatives to reduce the losses to almost half. So, that being the case, in FY'26, we do not expect at the store level to breakeven. Probably in FY'27, we will be very, very close to breakeven. We may not be able to breakeven, but we will be very close to breakeven in FY'27 at the store level.

    — Karuna

Growth

  • Beauty Portfolio (ex-distribution) Growth Growth · near future · Medium confidence high single digits
    we are fairly confident that we should get into this high single digits in the near future and move past that as well.

    — Biju Kassim

Market context

  • Overall Growth Momentum Growth · Q3 FY26 · Medium confidence double-digit
    We anticipate double-digit growth momentum to continue, driven by early festive demand, upswing in beauty and fashion categories, particularly in beauty wherein it's in the peak quarter for them.

    — Kavi

What to watch in Q3 FY26

Departmental Store Openings

next quarter (Q3 FY26)
Current Delayed in Q2
Target 5 stores opened in Q3

Why it matters

Verifies the company's ability to execute its store expansion plans after Q2 delays, contributing to overall growth.

We will be opening five departmental stores this quarter and four to five in Q4.

Risks & concerns

  • Sluggish discretionary spending and consumer caution

    medium

    Sluggish growth in discretionary categories and consumer goods, with urban consumers cautious due to inflationary concerns and geopolitical uncertainties.

    Management acknowledged

  • Planned losses in new businesses (INTUNE, ssbeauty.in)

    medium

    INTUNE and ssbeauty.in are in investment phase, incurring planned losses due to front-loaded investments in store openings, marketing, and backend infrastructure.

    Management acknowledged

  • Moderation and competitive intensity in beauty segment (ex-distribution)

    medium

    The beauty segment is 'overheated' and facing pressures at the masstige level, impacting growth outside of the distribution business.

    Analyst acknowledged

  • Delays in departmental store openings

    low

    Opening of new departmental stores was delayed in Q2 due to approvals and other factors, though targets for Q3/Q4 remain.

    Management acknowledged

Q&A highlights

7 direct
Moderation in value fashion segment and overall industry dynamics Direct
So, while there has been moderation, maybe for other players, we are seeing that once we are improving our operational efficiencies, we are seeing an uptick in demand. In fact, the festive looks very, very strong for INTUNE as we speak in the month of October.

Analyst questioned the broader industry trend of moderation in value fashion, and management clarified their specific INTUNE performance and positive festive outlook.

Asked by Sameer Gupta

Core business EBITDA margin for H1 FY26 vs. full-year aspiration Direct
Q1 and Q2 are relatively sort of a slack season, and Q3 is the one which drives a significant amount of sales... With the sales improving in Q3... we should be able to see a mid-single-digit EBITDA margin or slightly better than mid-single-digit EBITDA margin for the core-business.

Analyst sought clarification on the lower H1 EBITDA margin for the core business, and management explained seasonality and reaffirmed full-year margin guidance.

Asked by Sameer Gupta

Aggression in INTUNE store openings despite positive festive demand Direct
we were talking about a 30 to 40 store opening plan for INTUNE. At that time, we were also reworking on our supply chain and a 2.0 version of INTUNE... we figured out there are a few things which we need to work on and improve upon, which we have done now. The early October results are fantastic.

Analyst questioned the pace of INTUNE expansion, and management explained strategic adjustments to supply chain and store experience, which temporarily slowed openings but are now yielding positive results.

Asked by Ashutosh Joytiraditya

Sustainability of 9.4% like-for-like growth in departmental stores Direct
It is coming through one, increase in customer entries... Second is, we are seeing a growth in our premium portfolio... and for overall it is 9%. So, it is obviously over-indexed on that. 'Black card', which is the heart of our First citizen program or whether it is the 'Silver Card', I think the card system is really working well.

Analyst probed whether the strong LFL growth was sustainable or a one-time event, and management attributed it to structural improvements in customer engagement, premiumization, and loyalty programs.

Asked by Ashutosh Joytiraditya

INTUNE breakeven target revision from FY26 to FY27 Direct
in FY'26, we do not expect at the store level to breakeven. Probably in FY'27, we will be very, very close to breakeven. We may not be able to breakeven, but we will be very close to breakeven in FY'27 at the store level.

Management revised the breakeven timeline for INTUNE, indicating a longer investment horizon than previously guided, which impacts short-term profitability expectations.

Asked by Ankit Kedia

Muted departmental store openings despite strong footfall and LFL growth Direct
I would love to open, I would love to double the store opening... But because of approval, OC, various things, they got delayed... Having said that, I think we will have between nine to ten stores between Q3 and Q4.

Analyst questioned the slow pace of departmental store expansion, and management clarified that delays were due to external factors (approvals) but reiterated a strong pipeline for the rest of the year.

Asked by Ankit Kedia

Lagging growth in the core beauty portfolio (ex-distribution) Direct
the premiumization as a journey is doing extremely well on the Prestige segment... Acknowledge the fact that at the masstige level, the pressures still continue... we are fairly confident that we should get into this high single digits in the near future and move past that as well.

Analyst highlighted a segment underperforming, and management explained the strategic focus on the higher-margin Prestige segment and acknowledged market pressures in other beauty categories.

Asked by Ankit Kedia

Share price performance, lack of dividends, and debt levels Partial
the retail has been impacted by the slowness in the last two years, whereas this year the Shoppers Stop performance beat in Q1 and Q2 has been quite strong... We have also invested in the new business, INTUNE and SSBeauty.in, which, because of the investments, it has reported losses and our 100% subsidiary Global SSB has grown by 103%.

An individual investor raised concerns about shareholder returns and debt, prompting management to reiterate the company's strong operational performance and strategic investments for long-term value creation, without directly addressing the dividend or promoter pledge.

Asked by Jai Prakash

2 min read 7 chapters

Detailed narrative

Operating Environment and Strategic Response

Q2 FY26 was characterized by sluggish growth in discretionary categories and cautious urban consumers due to inflationary and geopolitical concerns. Despite these external challenges, Shoppers Stop maintained its performance, attributing success to a focused premiumization strategy and key initiatives. The company also noted an overhaul of GST amendments, which is expected to enable long-term growth.

Strong Core Business Performance

The core business demonstrated robust growth, with overall sales rising 7% and departmental store like-for-likes achieving 9.4%, the highest in a decade. Customer entry increased by 6% like-for-like, and Average Transaction Value (ATV) was up 8%, driven by a 6% increase in Average Selling Price (ASP) and a 2% increase in Items Per Transaction (IPT). The premium product mix grew 16%, now constituting 69% of the total mix, reflecting the success of the premiumization strategy.

Profitability Turnaround and Margin Outlook

EBITDA for the core business grew by 42%, and Profit Before Tax (PBT) turned positive, moving from a loss of ₹12 crores to a profit of ₹9 crores, an improvement of ₹21 crores. Management expects to achieve a mid-single-digit or slightly better EBITDA margin for the core business for the full year FY26, attributing lower H1 margins to seasonality and anticipating stronger performance in the festive Q3.

Performance of Key Categories

The Beauty segment continued to outperform, growing 22%, with fragrances leading the charge. Watches and Handbags also recorded strong double-digit growth of 13% and 11% respectively. The First Citizen Club, with 13 million members, contributed a significant 83% to total sales, marking a 270 basis points increase in contribution.

New Business Investments and Distribution Growth

New ventures, INTUNE (value fashion) and ssbeauty.in (digital beauty platform), are in an investment phase and incurring planned losses due to front-loaded investments. However, INTUNE showed positive like-for-like growth in Q2, improving from negative growth in Q1. The Global SSBeauty (GSSB) distribution business delivered outstanding performance, growing an impressive 103% year-on-year, marking a significant milestone in the company's beauty strategy.

Store Expansion and INTUNE Breakeven Revision

New departmental store openings were delayed in Q2 but the company plans to open five stores in Q3 and four to five in Q4, targeting 9-10 net stores for the full year. For INTUNE, three stores opened in Q2, with five planned for Q3 and 8-10 for Q4. The breakeven target for INTUNE at the store level has been revised from FY26 to FY27, with management expecting to be very close to breakeven by then.

Q3 Outlook and Festive Season Momentum

Management anticipates double-digit growth momentum to continue in Q3, driven by early festive demand and strong performance in beauty and fashion categories. Early October results are described as 'fantastic' with 'incredible numbers of growth', indicating a strong start to the festive season, which is seen as a combination of improved market sentiment and the company's strategic initiatives.

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