Trent's shares crack 8% as Street assesses store optimization plan

During the quarter, Trent opened 14 Westside and 62 Zudio stores (including one in Dubai). These stores were opened across 46 cities, and the company has consolidated two Westside and four Zudio stores during Q3FY25.

Shares of Tata Group's retail major Trent were sharply lower by over 8% on February 6, despite an in-line earnings scorecard for the third quarter, extending the fall for a fourth day in a row.

Investors seem to be selling the stock as the modest results did not match up to the FY26e valuation of over 80x, though off the peak of 120x, still trading at an elevated level, a CNBC-TV18 analysis showed. Shares of Trent are down by 25% so far this year.

Trent's fashion concepts also saw a high single-digit LFL (Like-For-Like) growth during Q3FY25, which may have dampened the investor interest in the stock.

Read More: Trent Q3 - Net profit rises 34% to Rs 497 crore, in line with estimates

The company announced a store portfolio optimization plan, according to which Trent will upgrade smaller footprint stores with newer ones. There are no details on the cost involved in the store upgrades, as part of this optimization plan.

"This involves upgrading or consolidating smaller footprint stores with newer stores in more attractive micro markets," said the retail giant, without sharing more details of the portfolio optimization agenda.

Trent added that aside of differentiated products, its 'aesthetically attractive stores' add to the value proposition of its customers. "While store expansion is a key growth lever for us, maintaining the quality and physical aesthetics of stores and ensuring consistent customer experience is equally an important objective," said Trent.

Trent said it places 'quality and physical aesthetics' as equally important to store expansion, as a growth lever. "...we continue to selectively refresh our store footprint across concepts, with presence now across 201 cities," said Trent. The aggressive store expansions in recent years have driven revenue growth for the company.

Noel N Tata, Chairman of Trent reaffirmed the focus on store quality, in his statement. "We remain on track to strongly expand our reach and at the same time improve the quality of our store portfolio. The strong store opening program this year together with other levers keeps our growth journey on track," said Noel N Tata.

During the quarter, Trent opened 14 Westside and 62 Zudio stores (including one in Dubai). These stores were opened across 46 cities, and the company has consolidated two Westside and four Zudio stores during Q3FY25.

Trent's other emerging categories such as beauty and personal care, innerwear and footwear contributed to over 20% of revenue.