Trent Q1 results: Net profit more than doubles to Rs 393 crore, beats estimates; stock jumps 11%

Trent Q1FY25 Results

Trent Ltd on August 9 reported a consolidated net profit of Rs 392.6 crore for Q1 FY25, rising 126 percent from a profit of Rs 173.48 crore in the same quarter of the previous financial year. Trent earnings beat Street expectations with a wide margin.

The revenue from operations for the Tata Group company came in at Rs 4,104.4 crore, rising 56 percent from Rs 2,628.37 crore in the year-ago quarter, the company said in a regulatory filing.

According to a Moneycontrol poll of five brokerages, Trent was likely to report a revenue growth of 45.7 percent at Rs 3,695 crore. Net profit was expected to come in at Rs 294 crore.

Earnings before interest, tax, depreciation and amortization (EBIDTA) was at Rs 612.6 crore. The EBIDTA margin rose to 14.91 percent during the quarter, up nearly a percentage point from 13.93 percent in the year-ago period.

Trent opened 25 stores during this quarter.

Noel N Tata, Chairman, Trent Limited said, "The market opportunity associated with building brands and a pure play direct-to-customer  business like ours is immense." He thus, shared plans to continue expansion plans and deepen store presence to be closer and convenient to customers and reinforce brand promise.

He further added, "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 to keep us relevant for our customers."

With a presence in 178 cities, the business as of June 30 in store portfolio has 228 Westside, 559 Zudio, and 36 stores across other lifestyle concepts. During the quarter the company opened 6 Westside and 16 Zudio stores across 12 cities.

The gross margin profile of Westside and Zudio remains consistent with earlier trends. Overall, the operating EBIT margin for Q1FY25 was 10.6 percent as compared to 7.8 percent for Q1FY24.

The Star business, a retailer of fresh food and groceries, added 6 stores in this quarter, and now it stands with a total of 72 stores. The Star business reported operating revenue growth of 29 percent in Q1FY25 with like-for-like (LFL) growth of over 20 percent.

"We have applied Trent’s playbook to the Star business and are witnessing strong customer traction. Several new stores were added in Q1 and we expect a steady expansion of our portfolio going forward. The success of 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,” Tata said.

The business witnessed improved operating performance driven by its own brands, staples, and fresh & general merchandise offerings which now contribute to over 70 percent of revenues.

"Given the increasingly positive economics, the Star business displays attributes of a differentiated & scalable model and is a key and additional growth engine in our portfolio," as per the company's regulatory filing.

Trent stock jumped on Q1 results, with the share price at Rs 6,265 in the afternoon trade, up 11 percent from the previous close.