Trent revenues and PAT jump 87% yoy each to Rs1,613 crore and Rs140 crore in Q3FY22

11 Feb 2022 , 10:14 AM

Trent Limited on Thursday announced its financial results for the third quarter ended December 31, 2021. Consolidated revenues of Rs1,613 crore grew by 87% over Q3FY21 and 53% over Q3FY20. Profit after tax of Rs140 crore (as attributable to equity shareholders) registered a growth of 87% over Q3FY21 and 159% over Q3FY20.

The consolidated results also incorporate the IndAS 116 lease accounting requirements. The net effect of IndAS 116 was an adverse impact of Rs28 crore for the Q3FY22 and Rs76 crore for the 9MFY22.

At around 10.20 AM, Trent Ltd was trading at Rs1,063.70 per share down by Rs11.85 or 1.1% from its previous closing of Rs1,075.55 per share on the BSE.

The company said in a filing that consumer sentiment continued to recover in Q3 on the back of the maturing vaccination drive, further relaxation of pandemic related restrictions, and the festive season.

Fashion concepts operated during the quarter with a degree of normalcy and limited pandemic related loss of trading days/ time

• Westside registered revenues of over Rs1,000 crore for the quarter with LFL growth of 9% and 49% vis-à-vis FY20 (pre-covid) and FY21 respectively
• Emerging categories like beauty and personal care, innerwear, and home saw growing traction
• Westside witnessed robust traction online with over 5% of revenues coming from online channels in the 9M even as stores recovered fully

On the back of robust recovery in revenues, operating profitability also registered encouraging growth. As required by the applicable standards Rs10 crore has been accounted as part of other income in the current quarter notwithstanding its operating nature

The reported results incorporate the IndAS 116 lease accounting requirements reflected across rent, depreciation, other income and finance costs in the statement of profit and loss. The net effect of IndAS 116 accounting on the standalone profit before tax was an adverse impact of Rs26 crore in Q3FY22 and Rs70 crore in 9MFY22. Other income primarily includes rent waivers, investment & dividend income/ fair value changes and recognition of IndAS 116 impact of lease modification/ termination.

Outlook
As of date we operate 197 Westside and 177 Zudio stores. We continue to remain focused on accelerating our store expansion program. Also, we are committed to delivering an aspirational lifestyle experience across our portfolio. In keeping with this agenda, we are prioritising refresh of our stores and simultaneously consolidating/ exiting stores that are suboptimal from a brand perspective.

The company said its transition to an annual subscription model (WestStyleClub) has witnessed positive offtake from customers with significant jump registered in on-going recruitment, initial spends, broad basing of category penetration and renewals in recent weeks. In many ways the muted footfall recovery was compensated by significant growth in spends of StyleClub members.

Over the recent quarters, notwithstanding the pandemic, we have retained the emphasis on inventory disciplines and initiatives to drive supply chain efficiencies. Consistent with our disciplines, we commenced the autumn/winter end of season sale (EOSS) only on January 1, 2022 and exited the EOSS within planned timelines. While the Omicron wave impacted sales in January, it was mitigated in part by the strong online traction for Westside and the recovery in the last fortnight has been encouraging.

Noel N Tata, Chairman, Trent Limited said, “The third quarter witnessed a strong business rebound and we have been pleasantly encouraged by the rapid recovery in customer offtake. In many ways, the playout in Q3 is indicative of the performance potential of our brands both in terms of growth as well as profitability. Our prospects remain robust owing to an accelerating shift to branded products, emergence of digital/seamless channels of engagement and a growing appetite for aspirational yet strong value propositions.

On the fashion front, we are on-track to have more than 425 fashion stores by March 2022. Increasingly, our Star food business with tight footprint stores, sharp pricing and focus on fresh & own brands is a model that is witnessing resilient customer traction.”

He further added,” the performance of Star stores operating under this model is encouraging and we continue to evolve our property portfolio to align with this proposition. Given the milder playout of the Omicron wave and the mature vaccination drive, I increasingly believe we are moving on to the next phase of recovery and growth. We are confident that the business has the expertise and importantly the ambition to pursue market opportunities with an integrated back end and nevertheless differentiated customer propositions. We remain committed to building out differentiated brands and a strong expansion of our reach through stores and digital platforms.”