India’s Shoppers Stop posts 83% drop in Q2 profit on weak demand

BENGALURU (Reuters) – India’s Shoppers Stop on Wednesday posted a 83.2% fall in second quarter profit as the department store was hit by rising expenses and weaker demand, with customers delaying purchases of clothes and cosmetics due to a late festive season.

The festive season in India – which started in September last year – brings in the lion’s share of retailers’ annual sales as customers splurge on new clothes, accessories and other items. The 2023 season begins late October.

Shoppers’ Stop said consolidated net profit came in at 27.3 million rupees in the three months ended Sept. 30 from 162 million rupees a year earlier, but added that the industry expects demand to improve “materially” in the third quarter.

“As we enter the festive season, we anticipate a rebound in discretionary spend, propelling the company’s growth trajectory further in the second half,” Kavindra Mishra, Chief Executive Officer of Shoppers Stop said.

Shoppers Stop, which sells products ranging from Vero Moda apparel to Michael Kors watches at its stores, said its total expenses rose 5%. Revenue came in at 10.39 billion rupees, up nearly 3% from a year ago.

The department store operator continues to grapple with challenges in smaller cities and faces competition from ‘Centro,’ owned by billionaire Mukesh Ambani’s Reliance Retail Ventures.

Separately, the company has also approved an investment in Pahadi Goodness upto 40 million rupees ($480,676.79) done by its unit Global SS Beauty Brands.

($1 = 83.2160 Indian rupees)

(Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Nivedita Bhattacharjee)