Shoppers Stop Ltd (SHOPERSTOP) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Shoppers Stop Limited Q2 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance
Moderator: during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Miss. Deepali Kumari from Arihant Capital. Thank you and over to you, ma'am.
Deepali Kumari (Arihant Capital): Thank you so much. Good evening and thank you all for joining us on the Shoppers Stop Q2 FY '27 earnings conference call. Today we have with us the senior management represented by Mr. Kavindra Mishra, Customer Care Associate, Managing Director and CEO, Mr. Pankaj Chaturvedi, Customer Care Associate and CFO. We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session. I must remind all that the discussion in today's earning call may include certain forward-looking statements and must be viewed, therefore, in conjunction with the risks that the company faces. Please restrict your questions to the quarter's performance and to the strategic questions only. Housekeeping questions can be dealt with separately with the IR team. I would now request Mr. Kavindra Mishra for the opening remarks. Thank you and over to you, sir.
Kavindra Mishra (Shoppers Stop Ltd): Thank you, Deepali. Good evening, all. I am joined with Biju and Mahesh, in addition to our colleagues from the finance team, Pankaj, who is our CFO, JP and Rohit. We have uploaded the investor presentation on our corporate and stock exchange website. Let me start with talking about the current operating environment. The current operating and consumption environment which started picking in Q1 sustained the momentum through Q2. And I'm happy to share that the demand continues to remain strong. Both Raksha Bandhan and Onam saw good con- consumer traction. And I'm happy to share that the run-up to Pujo in East and Dussehra in key markets has been significantly strong. And I I And I would comment on this in detail. Talking about the festive season, the start of the Pujo calendar for East market has been very good, and we are fi- witnessing a healthy mid-teen like-for-like growth in our stores. Given the fact that we have a very strong base in East, these numbers are very encouraging. Similarly, the Dussehra calendar too has shown a strong upsurge with a mid-teens like-for-like growth. Coming to our quarter two performance, here are some of the key highlights. Given the background of festive calendar shift from Q2 last year to Q3 this year, I am pleased to report that the results for Q2 have been quite encouraging and demonstrate the execution of the Shoppers Stop 2.0 strategy beautifully. While on a non-GAAP consol basis, our revenues grew by 7%, EBITDA grew by 56% and as a result, we were able to turn around PAT from a loss of INR 7 crores in last year to a profit of INR 6 crores this year. Basis GAAP also, PAT recorded a positive swing from INR 20 crore loss in last year to INR 3 crore profit this year. Let me talk about individual verticals now. Starting with an update on the departmental store business, we opened four departmental stores during the quarter: Sindhu Bhavan in Ahmedabad, Jabalpur, Bailey Square in Patna and Jhansi, which means we opened total in total six departmental stores in the H in H1. From a earlier guidance of gross store openings where we had mentioned that we will open between 9 to 10 stores, we are looking at 12 stores openings this year, and in line with our strategy, these are upmarket stores with elevated designs, modern ambience and premium assortment. We'll be opening our seventh store in Pacific Mall in Jaipur, which is North India's largest mall in next week on 23rd October. The like-for-like business for departmental stores grew by 2% this quarter with a total growth of 4%. Adjusted for the festive calendar shift, because Pujo dates shifted from September to October, the like-for-like growth was 6.5%. Our consistent focus on premiumization and experiential retail continues to resonate strongly with consumers. Our customer entry grew by 1% for like-for-like stores and overall growth of 7.7%. We had the highest ever additions to our First Citizen loyalty program with 2.5 lakh new recruitments. The premium end of our loyalty program, which is our Black Card program, has reported the highest ever enrollment. We had 19,000 new recruitments and highest ever renewals of 21,000, which is a renewal rate of around 66%,
Kavindra Mishra (Shoppers Stop Ltd): besides personalized service standards. The total loyalty membership base grew to 14.1 million. The total contribution this quarter was 84% with a repeat rate of 68%. Noticeably, our numbers across the loyalty program metrics continue to grow. What was especially heartening for us was the fact that with the positioning change, we were also able to attract a new set of consumers, and 37% of our bills were made by consumers who came for the first time in our stores. With constant focus, the premium portfolio contribution in stores improved by 390 basis points, and they stand now at an all-time high of 73%. And the ATV for the quarter has gone up by seven by 9%, which now stands at rupees 5,471, showing core operational strength. Our personal shopper program, which is central to our experi- experiential retail strategy, is now contributing 27% to our revenue, which is a growth of around 200 bps versus last year. Sales generated through personal shoppers grew by 13% with total sales reaching 349 crores for the quarter. In our quest for the premiumization and service experiences, we are resourcing the stores through more personal shoppers, and we see this contribution reaching to 30% of revenue by end of the year. As a part of our premiumization strategy, we have always talked about about the five power categories. They continue to outperform within the departmental stores. Watches grew 24% YoY, handbags grew by 16%, fragrances by 13%, footwear by 9%, and sunglasses by 8%. We are also seeing a very strong growth in fashion, and we believe that this augurs well for the coming festive. Now, I will move on to the private brands business. Private brands continue to be a strategic key pillar for us in terms of offering differentiated ranges and covering the gap for a set of categories. We shall continue to focus on driving productivity and improving profitability to premiumization and rationalizing discounts. Despite reducing the number of brands and reducing the inventory by 26%, I'm very happy to share that we have seen a significant uptake in the profitability of the private brands concept. We had also announced a partnership with Aditya Birla Lifestyle Brands on the Stop Peter England collab. It brings together two iconic names in Indian menswear to deliver exceptional quality, contemporary style, and greater value for our consumers. I am very happy to share that the initial results have been quite encouraging, and we expect the same to accelerate further. Our beauty business continues to deliver encouraging momentum, and here's an update of the same. The overall beauty business, including Global SS Beauty, delivered a revenue of Rs 367 crores during the quarter, registering a healthy year-on-year growth of 18%, led by fragrances, which grew by 35%. With consistent efforts and new initiatives, including MAC loyalty program and pushing exclusive services, Estée Lauder business grew by 4% like-for-like for the second consecutive quarter after an LFL decline for the last four consecutive quarters. Our beauty distribution business continued its strong growth trajectory, generating revenue of Rs 168 crores, which is equivalent to 270 crores of GMV with a stellar 59% share growth year-on-year. We opened two boutiques in this quarter, and with this total, we now have 11 boutiques, four Armani, three NARS, two Shiseido, one Prada, and one Creed. We will continue to accelerate scale through ongoing capital allocation, which has generated healthy return on capital employed. The performance underscores beauty as a strategic pillar for Shoppers Stop, aiming high growth through strategic partnerships, digital acceleration, and store expansion. Let me throw some light on new initiatives, starting with Intune business. Our continuous commentary last year on Intune was that we need to stabilize the operations, improve the unit economics, and liquidate the old inventory before we start seeing the growth in business. I'm happy to share that the execution of the business has started showing initial results. We recorded revenue of 72 crores in Intune with a festive-adjusted like-for-like growth of 6%. Just like as in Shoppers Stop, the start of Dussehra and the festive calendar has been very positive, and we are growing mid-teen in Intune as well. Relentless focus on inventory freshness through in-season clearance and online accessibility helped us in reducing inventory by 33 crores year-on-year. Business is
Kavindra Mishra (Shoppers Stop Ltd): operating at an inventory level of 16 weeks cover, we are confident of operating with similar discipline in coming months, driven by improved full-price sell-throughs, robust supply chains, and more frequent drops. Due to this control, we are entering the Festive with a high freshness in merchandise, and we believe Q3 will be a very strong quarter for us. Our repeat customer business improved to 49%, while the ABVs improved by 6%, and the items per transaction were at 3.5. Given the fact that in Q1, our repeat customer mix was 47%, this quarter-on-quarter movement is a very good news for us. Led by improvement in Intune productivity and integration of ssbeauty.in into shoppersstop.com, we could reduce the EBITDA losses in new businesses by Rs. 8 crores in Q2 and Rs. 12 crores in H1. We expect the losses to reduce further in Q3 and Q4. We also believe that we'll be able to share our expansion plan, plans for Intune in our Q3 earnings call, something which has often been asked to us. Moving on to the e-commerce business, our investments and efforts over the last year on improving the UI/UX and integrating the site have started showing good results. We grew by 50% 52% over Q2 last year. Interestingly, we are seeing the impact of premiumization online as well. Our average bills value grew by 9%, and power categories like watches led growth, reflecting the premium behavior of our consumers across both offline and online. On store expansion and financial discipline, we continued a prudent capital allocation strategy focused on enhancing returns and reinforcing balance sheet strength. During the quarter, we opened seven stores, four departmental stores, two beauty boutiques, and one MAC shop-in-shop. The total inventory was optimized by Rs. 78 crores year-on-year. I'd like to share how we are leveraging AI across the business. Over the past couple of years, as an organization, we have been working a lot on both machine learning, language, and AI in various parts of our business. Within Shoppers Stop, we look at AI with two perspectives: revenue generation and cost. Under revenue generation, our focus is on personalization and targeting the consumer activation. We have just rolled out the Personal Shopper app version 2.0, which uses deep insights for enhancing the consumer experience. We have also rolled out the personalization of couponing for consumers in the stores based on their shopping behavior. We believe that as both these projects mature, they will be very meaningful in our consumer experience journey as well as driving the like-for-like growth. Under the cost mitigation, our focus is on sharpening the back-end systems and processes. Inventory planning and optimization through demand forecasting, which started with private brands, has now been extended to Intune as well. And efficiency being pushed will be seen over the next few quarters. Finally, let me reiterate our strategy going forward. We'll continue to accelerate premiumization. We'll continue to deepen our strategy by strengthening partnerships with leading brands and expanding our premium portfolio, launching new brands, and enhancing the premium shopping experience through new store openings and key renovations. Building on the momentum in consumer walk-ins, we will continue to elevate the Shoppers Stop experience through innovation, GTMs, and aspirational brand positioning. We'll continue to strengthen our footprint in premium malls and high potential locations, leveraging our growing preference among leading mall developers and reinforcing our position as the departmental store of choice. We'll continue to work and reduce the further losses in Intune in H2. And finally, beauty distribution is something which is a core target for us and we'll continue to expand the portfolio. We maintain our estimated revenue growth of mid-single, a little slightly higher LFL for FY27, and healthy expansion of profitability as already witnessed in H1. With this, I would like to open the floor for an interesting Q&A session. Thank you.
Moderator: Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press "*" and "1" on their touchtone telephone. If you wish to remove yourself from the question queue, you may press "*" and "2".
Moderator: Ladies and gentlemen, good day and welcome to Shoppers Stop Limited
Moderator: Ladies and gentlemen, thank you for being on hold. The management is joined online. We are now ready to commence the conference call. I would now like to hand over the call to Mr. Kavindra Mishra, MD and CEO, Shoppers Stop Limited. Over to you, sir.
Kavindra Mishra (Shoppers Stop Ltd): and the festive season began late in this quarter. As far as the customer profile goes, our average spends per customer grew by 8% to 4,874 rupees. First Citizen customers, who are our most loyal shoppers, contributed 82% to our sales, with the top 2 tiers contributing to 67% to overall sales.
Moderator: Our first question comes from the line of Avi. Please go ahead.
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