Trent shares jump 13%, touch ₹6,000 mark as Q1 earnings top expectations

Shares of Trent, a Tata Group company known for its portfolio of retail concepts, surged by 13% in today's afternoon trade, crossing the ₹6,000 mark for the first time, reaching ₹6,373 per share. This rally followed the company's impressive June quarter results, which exceeded market expectations.

Trent released its Q1FY25 results today during market hours, reporting strong performance across all key formats. Standalone revenue grew by 56% YoY to ₹4,104 crore, driven by aggressive store expansions in Zudio and double-digit like-for-like (LFL) growth in fashion concepts like Westside, Zudio, and other lifestyle stores.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 66.8% YoY to ₹612.7 crore, while profit after tax soared by 134.47% YoY to ₹391.2 crore.  Earlier, global brokerage firm Phillip Capital expected Trent to report a 74% YoY rise in net profit at ₹258.30 crore for the June quarter, compared with ₹166.67 crore in the same quarter last year.

Westside and Zudio continued to maintain consistent gross margins, with an overall operating EBIT margin of 10.6% for Q1FY25, compared to 7.8% for Q1 FY24.

Store portfolio

As of June 30, 2024, Trent's store portfolio comprised 228 Westside stores, 559 Zudio stores, and 36 stores across other lifestyle concepts. During the quarter, the company opened 6 new Westside stores and 16 new Zudio stores across 12 cities, expanding Trent's presence to 178 cities, according to the company's earnings filing. 

Westside stores typically cover 20,000–30,000 sq. ft. and are spread across 86 cities, while Zudio, a value fashion destination, operates with stores ranging from 7,000–10,000 sq. ft.

The company reported that both Westside and Zudio continued to show consistent and encouraging traction, despite challenges such as heatwave conditions in some regions and the general elections.

The WestStyleClub, Westside's loyalty program, delivered strong results, while emerging categories like beauty and personal care, innerwear, and footwear gained significant customer traction. These emerging categories now contribute to over 20% of the company's standalone revenues.

The Star business, which operates 72 stores, including six new stores added during the quarter, also saw improved customer engagement and growing sales densities. This segment posted an operating revenue growth of 29% in Q1 FY25, with a like-for-like (LFL) growth of over 20%.

Speaking on the performance, Mr. Noel N Tata, Chairman, Trent Limited, said, "The overall market sentiment remains subdued with increased competitive intensity. On our part, we continue to witness encouraging traction for our lifestyle offerings across brands, concepts, categories, and channels. Focus on delivering consistent and improved value propositions keeps us relevant for our customers.

"Several new stores were added in Q1, and we expect a steady expansion of our portfolio going forward. The success of its own branded products also augurs well for the Star business. We are confident that this business is well poised to shift gears and deliver substantial value to customers and shareholders," he added.

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