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Shoppers Stop – Recovery in Lifestyle Spending Helps

November 5, 2009

Shoppers Stop Limited (SSL) on a consolidated asis reported a growth of 9.1% yoy in its revenues during 2QFY2010 to Rs382.2cr (Rs350.1cr). SSL clocked the growth on the back of SSS growth of 2.3% for Shoppers Stop departmental stores and 1.8% growth for all formats on yoy basis,thus ending the declining trend posted for the last three quarters. SSL’s Bottom-line improved significantly thereby posting a profit of Rs8.7cr in 2QFY2010 against a loss of Rs18.3cr in 2QFY2009.

The performance is significantly impressive on qoq basis as in 1QFY2010 the company had posted a 6.3% decline in departmental stores sales and a 7.5% decline in all formats sales. The growth was the result of increase in average space of 13.6% despite 2.6% decline in sales per sq ft.

The company during the quarter added one Shoppers Stop store and one Crossword store. The number of customers entering the stores improved by 5.3% yoy.

According to various analysts, Shoppers Stop is expected to report an EPS between Rs 6.5 to 7.5 and Rs 12 to Rs 14 for FY10 and Fy11 respectively. One can HOLD or BUY on corrections, around 200 levels.

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