Shares of Shoppers Stop rallied nearly 12% in early trade to hit record high on Wednesday as investors cheered the apparel retailer’s June quarter earnings that came in line with market expectations. The department store chain, owned by the K Raheja Corp, has reported strong results in the first disruption-free quarter as consumer sentiments improved with the economy reopening, which led to an increase in footfalls.

Cheering Q1 results, Shoppers Stop shares price opened higher at ₹574, against the previous closing price of ₹541.70, and gained as much as 11.7% to hit a 52-week high of ₹605.15 on the BSE. The apparel stock breached its previous high of ₹598.65 touched on April 28, 2022. The stock had hit an all-time high of ₹792 on January 4, 2011.

The counter has gained 168% in the past 11 months, with share price rebounding from its 52-week low of ₹225.75 touched on August 23, 2021, to an intraday high of ₹605.15 today. The market capitalisation of the midcap stock surged to ₹6,326.9 crore as more than 1.2 crore shares changed hands over the counter on the BSE as compared to the two-week average volume of 0.26 lakh scrips.

On Tuesday, Shoppers Stop reported profit after tax (PAT) of ₹23 crore in the June quarter (Q1FY23), compared with loss of ₹118 crore in a year-ago quarter, driven by solid operational performance. The net sales jumped nearly five-fold to ₹942 crore as against ₹201 crore in the corresponding period last year. The operating profit or EBITDA for the quarter stood at ₹67 crore against net loss of ₹116 crore in the year-ago period.

Segment wise, private brands’ revenue grew by 387% YoY, while the beauty division reported a surge of 321% on yearly basis. The e-commerce sales continue to grow by rising 29% YoY in the April-June quarter of 2022.

Going ahead, the company expects FY23 to be one of the strongest years for the retail industry due to easing of Covid-related restrictions as well as higher ticket purchases led by pent-up demand.

"The strong growth momentum, seen March 22, persisted through the first quarter of FY23 and continuing in July. We recorded a strong quarterly performance, and believe that the growth will continue in the coming quarters due to easing of Covid Related restrictions. This, coupled with the upcoming festive season, is likely to release a significant pent-up demand and further aid the Company's revenue growth,” says Venu Nair, MD & CEO at Shoppers Stop.

“We expect good demand in tier-2 cities and beyond, with the rise in smartphone penetration, and the growing adoption of digital payment systems. We plan to launch new stores primarily in tier-2 and tier-3 cities while sustaining our investments in store renovations, during the year," Nair adds.

The company continues to remain debt free at the end of June quarter of 2022, while it opened six new stores during the period under review. It also boarded Bollywood actor, Sanya Malhotra, as the brand ambassador for private brands.

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