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Trent Ltd reported 13 times rise in consolidated net profit in the March quarter at ₹704.2 crore, due to an exceptional gain of ₹576 crore arising from its reassessing its lease liabilities and right of use assets.
Revenue in the quarter rose 51 per cent to 3297.7 crore, as the company added 104 stores. “Our chosen strategic pathway has enabled the company to scale up in a challenging and competitive market in FY24,” it said in a release.
“In a competitive market, we continue to experience resonance and customer traction for our lifestyle offerings across brands, concepts, categories and channels. The growing of our offerings, resilience of our business model choices and the strength of our platform are reflected in our business results,” said Noel N Tata, Chairman, Trent. “We will continue to expand and deepen store presence with the aim of being ever closer and convenient to customers reinforcing our brand promise,” he added.
The retailer ended the year with 811 stores of which 232 were Westside, 545 Zudio and 34 stores across other lifestyle concepts. It added 12 Westside and 86 Zudio stores across 65 cities including 25 new cities.
The operating EBIT margin in Q4 according to the company was 8.2 per cent compared with 2.8 per cent year ago.
Like-for-like growth, a key metric for retailers, rose 10 per cent year-on-year. The company said that emerging categories such as beauty and personal care, innerwear and footwear continued to gain traction with customers, now contributing to over a fifth of standalone revenues.
Online channels, including the super app Tata Neu, contributed to over 6 per cent of Westside revenue.
Star hypermarket
The topline does not include the Trent hypermarket business under Star but a proportionate share of the profitability of the venture is accounted for in the results.
Under Star hypermarket it has 66 stores and the company said it reported operating revenue growth of 30 per cent in Q4. Almost, the entirety of this growth was from like-for-like stores. The business also registered an all-round operating performance improvement, driven by store brands, staples, fresh and general merchandise offerings.
“Given the increasingly positive economics, we remain convinced that we have a differentiated and scalable model to pursue. Consequently, we see Star as a key and additional growth engine in our portfolio,” the company added.
On the lease liabilities the company explained that the lease contracts for its stores were for varying periods with no committed economic obligation on the company beyond the lock-in period. Stores are periodically reviewed and consolidated, with closures also taking place. Estimates relating to lease terms under Indian accounting standard “involves exercise of significant judgement in congruence with store portfolio strategy and business model. Against this backdrop, it is considered appropriate to reassess estimates in Q4FY24 for recognising right of use asset (including related deposits) and lease liabilities.”
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