Tata Group retail arm Trent’s Q4 profit all but vanishes as Covid-19 third wave bites

Trent, the Tata Group company that owns Westside stores, barely managed to stay in the black in the January-March quarter as its consolidated net profit slid to just Rs 0.2 crore from Rs 140 crore a year earlier.

Profit slumped mainly due to the impact of lockdowns to contain the spread of the third wave of the COVID-19 pandemic, which hit India during January and February.

Consolidated income from operations grew 47% to Rs 1,329 crore during the quarter from Rs 906 crore a year ago. 

“The business was impacted in January and February 2022 by the third wave of the pandemic. Nevertheless, consumer sentiment recovered strongly thereafter. During March, our fashion concepts registered growth compared to pre-pandemic levels,” the company said.

The company claimed that both revenue and operating profitability strongly recovered in FY22 against FY21 despite the second and third waves of the pandemic.

“Over a three-year period (FY19 – FY22) revenue as well as operating profitability registered a CAGR of over 15% notwithstanding the interim impacts of the pandemic,” it said.

OTHER KEY HIGHLIGHTS

1) During the quarter, Westside registered same-store sales growth of 16%.

2) Online channel registered 74% growth in FY22 and contributed to around 7% of Westside revenue.

3) Emerging categories like beauty and personal care, innerwear and home gained traction with customers.

4) Due to the third wave of the pandemic, the company saw lower full price participation in the January end-of-season sale that materially impacted realised margins for the quarter.

5) From March, realised margins have recovered and are broadly consistent with the trends witnessed during October-December.

MANAGEMENT COMMENTARY

“Our continued emphasis on network growth during the preceding two years is starting to yield results as the pandemic impacts fade. Westside is now trading at an annual revenue run-rate of over Rs 5000 crore and commands encouraging market presence and traction," Trent Chairman Noel N Tata said. 

Star food business with tight footprint stores, sharp pricing and focus on fresh and own brands is a model that is continuing to witness resilient customer traction, he said.

"The performance of Star stores operating under this model is encouraging and we are evolving our property portfolio to align with this proposition," he added.