Good morning, and thank you all for joining us on Shoppers Stop Q1 FY27 Earnings Conference Call. Today we have with us the senior management represented by Mr.

Kavindra Mishra, Customer Care Associate, Managing Director and CEO, and Mr. Pankaj Chaudhry, Customer Suri Associate, Chief Financial Officer.

We will begin the call with the opening remarks from the management, after which we will have the forum open for the interactive Q&A session. I must remind you that the discussions in today's earning call may include certain forward-looking statements and must be viewed, therefore, in conjunction with the risks that the company faces.

Please restrict your questions to the quarter performance and to strategic questions only. Housekeeping questions can be dealt with separately with the IR team.

I would now request Mr. Kavindra Mishra for the opening remarks.

Thank you, and over to you, sir.

Thank you, Manav and Deepali. Good morning, all.

I am joined with Biju and Mahesh, in addition to our colleagues from finance team, Pankaj, our CFO, JP, and Rohit. We have uploaded the investor presentation on our corporate and stock exchange website.

Let me start with talking about the current operating environment. We have seen a pickup in demand from mid-February and it sustained through Q1, and the momentum continues continued in July as well.

While geopolitical uncertainties persist, consumer demand trends remain encouraging and resilient. When we spoke last time, we had anticipated a more significant supply chain disruption in Q3.

However, I am happy to share that it looks better than what we had initially thought. All our key brand partners are well secured with their supplies and providing confidence in inventory availability and readiness for the festive season, which I think is a very, very important and significant development for us.

We'll now move to the key highlights for the quarter and then talk about the way forward. I am pleased to report that the consolidated top line for Q1 FY27 grew by 10%, EBITDA grew by 40%, and most importantly, PAT turned positive at ₹5 crores versus a loss of ₹4 crores in Q1 FY26.

Our last year results GAAP included one-off gain of ₹5 crores in other income on account of reversal of ROU liability attributed to store closures. Excluding this, the loss reduced by ₹7 crores YoY.

Let me talk about individual verticals, starting with our own departmental store business. The LFL business for departmental stores grew by healthy 6% this quarter, net growth of 7% in spite of uncertain macroeconomic scenario.

Our focus on executing the constant messaging of premiumization and experiential retailing has started striking a chord in consumers' mind. Our customer entry grew by 3% for like-for-like stores and overall growth of 8.5%.

We had the highest-ever additions to our First Citizen loyalty program of 4.4 lakh new users. The premium end of our loyalty, the Black Card program, has reported highest-ever enrollment, 18,000 new recruitments, and highest-ever renewals of 21,000, which is a renewal rate of around 69%, demonstrating deep value proposition from consumer perspective besides personalized service standards.

The total loyalty membership base grew to 13.8 million. The total contribution during the year was in the first quarter was 85%, which is highest ever, with a repeat rate of 69%.

Noticeably, our numbers across the loyalty program metrics have grown over last quarter. With constant focus, the premium portfolio contribution in stores improved by 490 basis points, and they stand at now now at 72%, and the ABVs for the quarter has gone up by 10%.

It now stands at ₹5,704, showing core operational strength. Our Personal Shopper program, which is central to our experiential retail strategy, is now contributing 26% to our revenue.

Sales generated through Personal Shoppers grew by 12% with total sales reaching ₹321 crores. As a part of our premiumization strategy, we have always talked about the five power categories.

The top five power non-apparel categories continue to outperform. Watches grew by 24% YoY, Handbags grew by 18%, Fragrances by 17%, Sunglasses by 12%, and Footwear by 9%.

We opened two departmental stores during the quarter, Inorbit Vashi and Pavilion Mall. We had one more store opening in July, which is at Sindhu Bhavan in Ahmedabad, taking the YTD store openings to three.

In line with our strategy, these are upmarket stores with elevated designs, modern ambience, and premium assortment. Now let me talk about the private brand business.

PB continues to be a strategic key pillar for us in terms of offering differentiated range and covering the gap for a set of categories. We shall continue to focus on driving productivity and improving profitability through premiumization and rationalizing discounts.

In my earlier quarter speeches, I had spoken about launching of Haute Curry as a premium private brand. The success of the same has now encouraged us to drive premiumization in brands like Kashish and Bandeya, and we'll see a positive impact of the same in coming festive season.

We have launched premium Bandeya 2.0 collection in 25 stores, and initial results are very encouraging. Interestingly, we'll also be announcing a major collab with one of the leading fashion houses for one of our private brands.

We'll be talking about it in the coming quarter. During the quarter, we also optimized our private brand inventory by 11% vis-à-vis last year.

Let me talk about the beauty business now. The company's beauty business, including Global SS Beauty, delivered revenue of ₹327 crores during the year during the quarter, registering a healthy year-on-year growth of 15% led by fragrances, which grew by 34%.

With consistent efforts and new initiatives, including MAC loyalty program and pushing exclusive services, we saw a turnaround in Estée Lauder business with a 4.3% like-for-like after five consecutive quarters of LFL decline. Our beauty distribution business continued its strong growth trajectory, generating revenue of ₹129 crores, which is equivalent to ₹200 crores of GMV, with a stellar 53% growth YoY.

During the quarter, we launched one boutique each of NARS and Shiseido, taking the total number of premium boutiques to nine. We right now have four Armani, three NARS, one Prada, and one Shiseido stores.

The performance underscores beauty as a strategic pillar for Shoppers Stop, aiming high growth through strategic partnerships, digital acceleration, and store expansion. With all these concentrated efforts across verticals, the core business delivered an EBITDA of ₹48 crores, which is showing an increase of 18% YoY.

Now let me talk about the new initiatives, starting with Intune business. Our continuous commentary last year on Intune was that we need to stabilize the operations, improve the unit economics, and liquidate the old inventory before we start seeing the growth in business.

I'm happy to share that the execution of the business has started showing initial pickup. We recorded a revenue of ₹82 crores with a YoY growth of 21%, while the like-for-like growth was at 10% after four consecutive quarters of decline.

Relentless focus on inventory freshness through in-season clearance and online accessibility helped us in reducing inventory by ₹34 crores YoY and a further reduction of ₹11 crores versus March '26. As this is currently operating at an optimal inventory level of 13 weeks cover, we are confident of having a similar discipline in coming months, driven by improved full-price sell-through, robust supply chain, and more frequent drops.

The structured CRM outreach drove improvement in key KPIs. Repeat customer mix improved to 45% and items per ticket sustained at 3.8.

I'm also happy to share that Mahesh Nagdev has joined us as head of Intune business. With extensive experience at Trent and Max, he brings deep retail expertise, and I'm confident he will lead Intune through its next phase of growth, scale, and profitability.

Let me talk about the e-com business. Our investments and efforts over the last year on improving the UI/UX and integrating the site have started showing initial results.

We grew by 58% over Q1 last year. Interestingly, we are seeing the impact of premiumization online as well.

Our average bill value grew by 6%, and power categories like watches led growth, reflecting the premium behavior of our consumers across channels, both offline and online. As planned, we have completed the integration of ssbeauty.in with ss.com platform, which will deliver significant cost savings and operating leverage in the coming quarters.

Now I will talk about the store expansion and financial discipline. We maintained a disciplined and prudent capital allocation approach during the quarter, with a strong focus on driving returns and strengthening the balance sheet.

During the quarter, we opened eight stores: two departmental stores, four Beauty, and two Intune, alongside two MAC shop-in-shops. Total inventory was optimized by ₹80 crores YoY and by ₹36 crores versus March '26.

As stated before, we are on track to be debt-free by end of FY27. Let me throw some light on the usage of AI.

Over the past couple of years, as an organization, we have been working a lot on both machine learning and AI in many parts of our business. Within Shoppers Stop, we look at AI with two perspectives: revenue generation and cost.

Under revenue generation, our focus is on personalization and targeting the customer acquisition, use of camera vision to improve conversions and store layouts, and recommendations and focusing on the Personal Shopper app. Under cost mitigation, our focus is on sharpening the back-end systems and processes and, lastly, the inventory planning and optimization through demand forecasting.

We'll keep on discussing the impact of AI and how it is improving our efficiencies as we go forward in the coming calls. In the last, let me talk about the way forward for business.

First is we'll continue to double down on premiumization as a strategy. Premiumization as a strategy has started delivering results on ground for us.

As we speak, we have become the first port of call for almost any premium brand coming to India, and we are using this trend to work with strategic partners to drive efficiency. We'll be launching two exclusive Swiss watch brands within Shoppers Stop in the coming quarter, which is Quarter 2, which demonstrates our commitment to this strategy.

Focus on growing consumer walk-ins: we have built on this in Q1 and past quarters, and we'll continue to work on the same. To make Shoppers Stop brand as aspirational and stand out for experience and premiumization is something which we'll continue to work on with all our GTMs, which we keep on talking about.

Drive expansion of the brand in key markets in premium malls: I am delighted to share that our repositioning efforts have started yielding results, and we are increasingly becoming a department store of choice with some of the leading mall developers. We are on track to reduce losses in Intune business substantially.

The same will be reflecting from Q2 onwards. Finally, we remain committed to inventory optimization and operational rigor.

Our commitment to become debt-free by end of FY27 remains in place, and we are 100% sure to achieve that. With this, I would like to open the floor for an interesting Q&A session.

Thank you.

Morning to the team. I have two questions.

The first question to Mr. Mishra is, just to understand the forward guidance, what is Shoppers Stop's strategic roadmap for balancing its premium brand positioning with the need to attract younger audience, value-conscious customers, especially given the challenge of rising competition from online platforms and changing consumer habits?

That's my first question. I'll ask my second question after this.

Thank you.

Hi, Sucrit. If I understand correctly, the question was, how are we balancing our premiumization strategy with competition online?

Is that the question? If that's the question, as I correctly understand, then our stated intention is to be the aspirational, bridge-to-luxury departmental store, omnichannel store for the young Indian family, right?

Which means that we'll continue to premiumize, we will continue to bring more and more exclusive brands within the ambit of Shoppers Stop. I don't see where we are actually directly competing with the e-com players because a lot of consumer behavior is very different from what we are trying to drive.

We are looking at a little bit more mature customer, maybe the age which is around 30-ish, 30 years, 30th year of age, and that's the young family we are targeting as a strategic thing. For our younger customers, we want to be relevant.

Our current association with HYBE, which is the leading group which has created brands like BTS and, yeah, like leading Korean brands. We obviously are working with them to create that particular consumer and be attractive to them.

Fundamentally, as a business, we want our customers to come to us to satisfy their aspirations which are rising and which are more towards the premium side of business rather than only a value or around that piece of price.

Thank you. My second question to Mr.

Pankaj is, again, a forward-looking one. With store expansion, omnichannel investment, and rising operating cost, what are the key financial levers you are using to sustain profitability while funding growth?

Thank you. See,

we are very focused on our capital deployment. If you see, we have grown our cash from operations and EBITDA on a YoY basis.

We have given our guidance of opening 9 to 10 department stores every year. We also mentioned that we'll go cautious on our value format, which is Intune.

Once we stabilize the profitability, get the unit economics right, then we'll expand on that. On the online part, we are optimizing the cost by integrating our various online platforms.

You'll see a turnaround there as well. As far as the funding is concerned, our internal accruals are going to be sufficient to meet this expansion strategy that I just mentioned.

Apart from that, we are also investing in our subsidiary company, which is GSSB, which is also doing very well. The returns on that investments are also very healthy.

Even with all the capital deployment that I spoke about, the investments that we continue to do in stores and the subsidiary companies, we plan to be debt-free by the year-end. Did I answer your question?

Yes. Thank you and best wishes ahead.

Thank you.

Hi. Good morning, everyone, and first of all, congrats on a good set of numbers, and thanks for taking my question.

First question, sir, is on beauty. Now, if I exclude the distribution revenues, the beauty sales is flat.

If I even look at the last year or a few years before that, the contribution has actually not increased. In fact, if I look at 2 years back, it was slightly higher than what it is today.

I just wanted to understand, this is a category where premiumization as a lever probably is higher. We have had a head start in this category creating it.

Is it online, the large bulk of the audience has now shifted online and the online players like Nykaa, they are able to market it better with influencers or how to use categories, etc., where we are lacking, or is it just Estée Lauder, an issue? I heard you said that it has finally come to LTL growth after 4-5 quarters.

Is it a brand-specific issue or something lacking in our proposition? Any turnaround that you can basically guide towards will be helpful.

Thank you, Sameer, for the question. I think there are two or three parts of this how I would like to address it.

Obviously, let's assume that we are keeping the GSSB business aside for a minute and we're only talking about the retail business, right? Now, if I look at the retail business, which basically means the departmental store business and then the business which is there in our standalone Estée Lauder doors, the departmental store business continues to grow.

In fact, the non-ELCA business for us is growing by around 10%. We see a healthy growth there.

When you look at the base of Estée Lauder standalone doors, there are two parts of it. One is we have shut around 14-odd stores over the last year or so, which sits in the base and where you don't see a growth.

If I look about stores which are existing, we are actually growing by 4% like-for-like. In our minds, we have taken out the non-performing stores of Estée Lauder, focusing on what we have, and growing that business, that's one.

The non-ELCA business actually is growing really, really well. We spoke about the fragrances business, the overall growth there.

I think the departmental stores, the non-ELCA business is going around 10%. We see strong growth there.

Sorry, I didn't get that term that you're using. It's just department stores that you're talking about, right, which are growing well?

Yeah. The department stores are doing well.

The non-Estée Lauder business is growing well by around 10% or so. Estée Lauder business has also turned around and now is growing.

The reason why you see there is no growth or the numbers look flatish is because we have shut around 14 stores over last year, which are sitting in the base.

Thanks, Kavi, for this. All I can remember is that department store still used to be like 80-90% of our beauty sales at some point in time.

Is it still the case, or has the salience kind of in between gone up for the SIS or the stores?

I think, Sameer, maybe there's some misunderstanding there. The Estée Lauder stores actually, and especially for the Estée Lauder business, the standalone doors always had a 50-50 kind of a contribution.

Maybe I'm misconstruing. I think the overall revenue piece was 90%, not just beauty.

Sorry about it. Is this 50-50 now materially shifted towards department, or is it still a healthy 60-40 or something like that?

No.

It is, A, shifting towards department, B, we are also within the department building the non-Estée Lauder business. While Estée Lauder continues to be an important partner for us and we are growing that business, as I said that we are now seeing a like-for-like growth there, we are also building the non-Estée Lauder portfolio to balance the whole mix.

Sure. Just last one bookkeeping here.

If you could also give me the salience of Estée Lauder versus non-Estée Lauder within beauty, whichever way you analyze.

It will be around 60% would be non-Estée Lauder and around 40% would be Estée Lauder.

Okay. When you say 40% Estée Lauder, it will include the Estée Lauder which is sold across department stores also?

Across department stores, across standalone doors. What's happening now is that the non-Estée Lauder piece anyway is going very fast.

The Estée Lauder business within departmental stores is growing, but we are also seeing a turnaround in the Estée Lauder standalone doors.

Got it. The marketing of these brands is not under you.

They are individually marketed by the brands themselves in India.

Of course.

Okay. Got it.

Fair enough.

Like any other partnership with any other fashion player, for example, right? Yes,

yes. I just remember that at one point of time it was an exclusive partnership with Shoppers, but, of course, times have changed.

Yeah. Second question, I'm sorry, I took a long time on this, if I can squeeze another question with permission.

Please ask.

Second is on Intune. Last quarter, we had said that we need a sales throughput to go up by around 25 to 30% for us to be back in terms of store additions spree, and first half probably we would not see any store additions.

Now, this quarter is 10% healthy LFL. Is there any change in the strategy here, or are we still saying that it's still a wait-and-watch in terms of store additions, and you probably would want to look at this full year before committing any store additions here, or is there any change?

That's the question.

Okay. Two parts to that, Sameer.

As you rightly said, we have grown by 10% like-for-like, right, in Q1. We had said that we should be growing around 20%.

There are parts of it. The mall stores for us and the like-for-like stores actually are very close to what we wanted.

It is the high streets where we need to still see that pickup happening to the extent which we want. My sense is, as we initially guided in the last call is that we'll take the first 6 months to stabilize and see the operations are in place before we take a call on this.

I think the guidance remains same on that. We are focusing on improving the productivity, and with Mahesh coming also, I think there is a lot of action happening there.

We'd be in a much better space to answer this question in the next call. We're in the right direction.

The problems which Intune had over the last year, which was inventory, specifically the inventory and then operational issues, I think we have been able to lick those. Our inventory picture is much fresher.

The operational strength has come in place. We are seeing that the KPIs, which are an important reflection on whether you are running the business well or not, are all in a much more positive sense.

We are in a good direction. I think we have got a good set of stores.

See, we've got around 90 stores right now. That's a good number to fix these things, and we will see this is important, and it will see a big growth from our side.

We just need one more quarter to demonstrate internally that what we are doing is right and that we are there. Once all those problems are fixed, which my sense is where we are, but I want to wait for another quarter or so before giving a guidance on store openings in Intune.

Only one follow-up here, Kavindra. Basically, why I'm asking this is because let's say, in first half, all your metrics are satisfied, but would you still want to wait for an autumn-winter season before going ahead?

Plus, you're targeting a net cash by FY27. From a company perspective also, you might be in a better position or a comfortable position in accelerating store additions here from next year onwards rather than middle of this year.

That was the only thing. Even if you achieve the metrics that you are targeting, that was a thought.

No, no, achha thought hai. I think it's a good thought.

I don't think even if we have to open 5 to 10 stores in Q4 of FY27, that should be a problem for us, okay, because there are cost reductions and productivity happening across the board in the organization. If we have to invest also maybe for a 5 or 10 stores, with the investment which are there in Intune, Opening 10 Intune stores is equivalent to opening one Shoppers Stop.

One more Shoppers Stop. I don't see that as an issue, Sameer.

I don't see that an issue. Obviously, Q3 mein nahi khulega, but we already have identified the spaces and all.

We are just waiting for our internal numbers to be licked before we move into the next one.

Got it. This answers my question.

Thanks a lot. Sorry, I took a lot of time.

I'll come back in the queue.

No problem, Sameer. Thank you.

Sir, my first question is on the beauty distribution business. This business is continuously growing at 40-50%.

How much more investment is needed because our standalone entity is continuing to fund this business through equity? What's the medium-term target in this business?

Can we see margin expansion here, given that it's more of a B2B business? Can the profitability of the business improve from what we are seeing today?

I'll take the second part of the question. Okay.

First, thanks, the growth has been quite robust. If you think about it, the base was small, I think initially we achieved about 100% growth, but we are now settling at about 50-53%.

It is a function of two sets. One is existing brands and one is new brands.

Existing brands are growing quite healthy as well along with the new brands that's coming on board. On the financial side, margin expansion, I think we are at a relatively strong and good levels because we have a strong mix of organized and maybe a little bit unorganized channels.

I would say, yes, there could be, but it's not going to be significant. The margin element will play around there.

We also have plans to invest around ₹40 crores in this year, and currently we have healthy ROCEs of about 16 to 17%. As of now, I think all the moving pieces are factored and we're looking quite comfortable in terms of continuing this type of growth or maybe even slightly more as we move into the festive period.

From the medium term, if I have to ask, what could be the target say for FY29 for this business?

I would leave it to your judgment basis what we have tried to achieve, because there are multiple factors, I just don't want to cloud your judgment and our judgment based on that. It's a business that has got very strong opportunities, but it's also dependent on the macro elements and also based on the industry movements.

I think we look to have high double-digit growth, but beyond that, I wouldn't want to make a statement at this stage.

Typically, when the brands onboard, is there a timeframe for the brands to be exclusive with Shoppers Stop or they can go with your competitors anytime, the deals can be nullified for you? How much is the lead, in the sense if there are more brands which you are targeting, typically how much timeframe does it take to close the deals with this brand to be exclusive distributor partnership for India?

The exclusivity element is a conscious call. There are brand partners who are long-term, serious, and wanting to build their brands at a very strong level in the country, and India has been globally a very, very important market.

Unfortunately, the progression has been a little slow. It's a mixed bag.

Some of the partners who have been here for very long period have not seen really dramatic growth. We believe that we are at that cusp of that next big wave.

Partners also believe so, because if you look at many other markets, most of the markets are either stagnant or degrowing, China under pressure. Technically, globally, all the international and important brands, serious brands see India as the next big growth engine.

Having said that, the exclusivity is a norm that we prefer to get into, because at the end of the day, there is so much of good work and strong work that needs to be done and we can't have distraction. We prefer, and very, very rare, we take non-exclusive distribution.

In terms of the horizon, it's normally between 3 to 5 years because there are elements that needs sustained investments, and that is the reason why we think that an exclusive mid-term period is very, very important. To your point, yes, on the landscape, there are other partners, other competitors who are also pitching and bidding for brands, but honestly, in the last 3 years, we have really managed to secure much more than what the competition has.

Having said that, yes, we are quite cognizant of the landscape, and beauty as an industry is really getting quite interesting, so that will always have a healthy level of competition.

Biju, any brands which you onboarded 3 years back which have come for renegotiations and you have won them back or you have lost them, if you can just share some examples?

I can only tell you that we have continued to have good success. In fact, brand partners who started with one or two brands have given us multiple more brands at this point in time, which is looking quite strong and healthy.

As I said, fundamentally, as a group, we are always focused on something that is long-term sustainable, and we have believed in long-term partnerships. This is the reflection that we give and the comfort that we have given so far makes us look like a preferred partner for the long term.

Sure.

My second question is for Kavi. Kavi, can you share some cost-saving measures for this year which you are undertaken?

One is the SS Beauty cost savings, which could come in .com, which could come in Q2. At the store level, I see a lot of the retail area has actually increased versus the back-end area in some of the stores.

How does that help in profitability with higher retail space, productivity improvement towards profitability?

Thanks, Ankit. This is our favorite topic, which we keep on discussing continuously within the system, because, for us, space is the resource and how we optimize it is something which is super important.

If I just go back 2 years back and when we started talking about private brands and the role which each of the categories play, we said, for us, the GMROI is the most important criteria. We actually went through with a toothcomb, and we looked at all our portfolio and said there are certain categories, certain brands which are not adding value to us.

For example, menswear, private brands is something, except Bandeya, which does really well, we figured out that menswear is something where we need to optimize. We have actually converted a lot of those spaces into brands.

In fact, I just hinted upon a partnership also we'll be announcing in the coming month or so with one of the leading fashion houses, who will start working in a brand as a collab. I think a lot of that is happening.

How it helps us is, Ankit, the productivity for that space goes up by double. I think that's something which really is working well, and we'll start seeing the impact of all of those.

All of these changes, H1 is what we are targeting to execute, we will see the full benefit of it in festive. I think that's something that's very important for us.

The second thing what we are doing is we have also seen that around 35 or 40 stores, we had smaller Home areas, which were around 500 square feet, which were actually delivering 25% of the GMROI of the box of that particular store. That's also somewhere we have actually converted those spaces to national brands.

We will see at least a doubling of the productivity, if not more. All these things are happening as we speak.

Finally, as a project, what we have said is we looked at our spaces and said, can we actually reduce the areas which are non-productive and increase the spaces? We believe that all these initiatives put together over the next year or so have a potential to increase the like-for-like for 3 to 4%.

I think that is one thing. It will, on base case, it is accretive at that level.

That's one. Second is at the OPEX, obviously, there is a lot of work happening around that and taking care of that.

Electricity, I think all our stores are now moving into IoT, so that is also working out. For the new stores which we are opening, we have actually moved into a journey where we are moving into, for the first year, for first 6 to 12 months, we are focusing more on the rev share.

I think the productivity increases and the optimization is happening across the categories. I foresee that H2 is something where it gives me a lot of confidence on the base level execution which is happening.

Lastly, I think in terms of marketing, smarter use of CRM and smarter use of the personalization engine, and we see the result of that in the loyalty revenue increase. I think that's working really well.

Other income is now growing. We have seen around a 20% increase, and when I say other income, I'm talking about non-GAAP.

You may see it in a stronger way that that particular income is also growing strongly. I think a lot of initiatives on cost and other streams are happening, and especially as a team, we are very, very focused and excited about the space productivity project, and you will see the benefit of that in H2.

Any use of AI which we are doing which could actually aid productivity or profitability for us on the cost side?

I touched upon the AI impact. I think the most important one again would be on the one which we are piloting on camera vision, because what it does is it tells us about the hot areas of the store, which part of the stores are doing well, where the conversions are lower.

The way we are doing our layouting and all, a lot of work is happening on that piece, Ankit. Obviously, on back-end systems and processes, we are now using it across the board, whether it's in our cataloging, whether it's in the way we are creating our ads and all.

It's working across the board.

Sure. Kavi, last question.

This time festive is in quarter 3 versus quarter 2. Do you foresee a significant impact from the brand side in quarter 2 wherein the profitability could be impacted, footfalls are now shifted towards quarter 3 fully?

No.

There might be some impact of that in Q2, but between Q2 and Q3 So, Ankit, our baseline when we started this year, we were talking about a 5% for the for this year, I think the the LFL growth. My sense is after the way that after after Q1 has happened, that number should be around 6% and not lower.

Even if there is some impact on on Q2, between Q2 and Q3, we will do we will do really well. That's the confidence.

Sure. Thank you so much, Kavi, and all the best.

Thanks, Ankit.

Hi, sir. Good morning.

Congrats on good set of numbers. My question is regarding the gross margin.

The rest of the metrics are all tracking well and seeing kind of improvement, but gross margin is the only one which is seeing a continuous decline. Is it because the premium brands offer an absolute higher rupee gross margin, but a lower percentage point, or how should we see this going forward?

Thanks, Avinash. Great question.

I was waiting for this question to come. As we change our journey towards premiumization, and as we and I think stated strategy that we will work more and more on premium brands, non-apparel, what will happen there is that the gross margins might not be as a percentage point be seen as high, but the rupee flowing which happens because the productivity is going higher is much higher for us.

There will always be an impact of mix, which will help us. Like I spoke about, when I was answering about private brands and all, for example, private brand menswear would have a higher margin upfront, but the productivity is much lower.

When you are making these changes of premiumizing and putting higher more higher throughput brands, the margins might not appear to be percentage-wise the same, but the flowing in terms of the growth, for example, from a 4.7% full last year, Q1 we ended at 6%, and I believe that we should be at 6% for the entire year. That piece is so the margin mix or the gross margin percentage is more than enough met by the productivity increase, and I think that's the journey in which we are on.

I would urge everybody to look at the overall flow of EBITDA rather than only focusing on this, because we are doing a transition in the strategy. It's not that something we have just thought about it.

It's something which we have been stating quarter-on-quarter in our calls of this is the way we want to take things forward. I remember in my first call with the entire group where we said ki private brands mein there is a place where we'll premiumize for women and kids, and men's is something where we don't see a future, I think that's what we're executing.

Similarly, we always said that there are these five power categories which is the basis of how we are going to premiumize, and that's what we are doing. While the percentages might be lower, the resultant throughputs are far higher, Avinash.

Yeah. Sir.

Understood. The other one is regarding the beauty distribution.

If you can look at it there is a continuous improvement in the productivity of POS. Is this because you're adding on newer brands, and can you exactly classify what is a POS and what could be the potential peak revenue that a POS can generate?

Sorry, what do you mean by POS? Point of

sales. Yes.

No.

Basically, as and as I said earlier, we have a certain set of brands that are moving into the stage two of accelerated growth. We also have a set of brands that are new that is adding up to the current base.

What is also happening is that the POS is quite diversified between multiple players in the industry. If I have named few, for example, Shoppers Stop, Lifestyle, etc., the department stores, Nykaa, Tira, Sephora in the specialty stores, and obviously Myntra, Amazon, etc., Tata CLiQ, etc., on the e-commerce platform.

I think what is what is helping is also with the marketing element kicking in, because technically when you have the brand, sometimes it's a relaunch, sometimes it's a new launch. Once the marketing money and marketing campaigns kicking, naturally the goodness is seen on the productivity of the brands.

That is normally, let's say, between between multiple quarters and depending on the new launches. It's a combination of things.

For you to know, the existing brand business, which is already reaching maybe 24 months or 36 months of existence, is still growing at healthy 35%, whereas the market is around 20% or 22% at best. I think we are we are doing ahead of the market, which also means that ranking of these brands in the in the country is going up, and market share is also We are growing on the market share, and we are also growing on the rankings.

It is it is also full because we are reaching out to all the white spaces that exist because we are quite focused on the push on our source of business, whether it's structure, whether it's people, it's CapEx, it is tier-2, tier-3 cities, etc. I think we are starting to see a very, very strong and healthy healthy growth for all these existing brands as well as new ones.

Got it, sir. That's it from my side.

Thank you.

Thank you.

Yeah. Hello.

Am I audible? Yes.

Yeah. Good morning, sir.

Thank you. Sir, just I have one question from my side.

Sir, can I understand regarding the Intune profitability? We are having a positive like-for-like growth of 10% and we are reducing our losses from 15 to 10 crores.

Could you quantify how much of this improvement is coming from higher throughput that has gross margin and operating leverage, respectively, in that case?

Okay. I think so the question is on, Rehan, if I understand correctly, is on Intune profitability.

Yeah.

How the losses have come down, right? Understood.

The losses primarily have come down on the account of higher productivity. As I answered in one of the previous questions that we needed to grow at least by 25 20 to 25% for us to expand the base.

We had a throughput of 10%. We believe that there is still further scope on productivity.

While the mall stores are something which are now close to that 10,000 number which we wanted to be, the standalone stores are still much lower, and I think there is a scope there to go up. That's where we are in this journey right now.

Okay. Sir, just continuing the question, sir, could you just tell me what revenue run rate or store-level profitability is required for the format to achieve EBITDA breakeven at a network level?

No. Rehan,

if we are around 10,000, that's a very good number for us. That not only takes care of the store-level productivity, but as a business-level productivity as a standalone unit for us.

Sir. Thank you.

That's from my side.

Thanks, Rehan.

Yeah. Good morning, sir.

Sir, I had a question. When I look at the results, basically your depreciation and interest eats up all the good work you have done.

My question to you is what is the kind of expansion you are planning going forward? Expansion in number of stores.

I will take that question. See, the depreciation and interest that you look at is a function of our store opening and store closing.

For this year, as we have said that we will open around 9 to 10 department stores, and, yes, in last year there was a clear drive from our side on closing down the loss-making Intune stores. It's completely a function of these two points that I have told you.

If you want, you can elaborate your question around that because you only asked about the depreciation and the expansion. Did I answer?

No. Nothing to elaborate.

I'm just saying that, what is the thought process on you've said you'll be debt-free by the end of this year, end of financial year 27. My question therefore is just for the depreciation.

What your thoughts are that you will continue to expand by 9 to 10 department stores every year and then you will continue to open more Intune stores, continue to open more Beauty stores. The depreciation remains as it is, will go up.

Do you, when do you

Let me try to address that. See, depreciation is only a function of the stores that we open and the stores that we shut down.

We should focus more on our strategy, our input parameter, which is our expansion strategy. We plan to open about 9 to 10 department stores.

Intune stores we will open if we see the right opportunity post the profit strategy panning out for us. Again, the entire funding for these new stores and the CapEx and the expansion is through internal accruals.

We are generating enough EBITDA, enough cash flows, which will take care of this expansion. The guidance that we have given on being debt-free by year-end is after considering all these factors.

If you also look at our non-GAAP numbers, it will give you a comfort of the real cash that we are generating from the underlying business.

No, I've seen the non-GAAP numbers,

and

they have improved. I will say that.

It's just that I felt that if we could bring down the depreciation, probably the brand, Shoppers Stop, whatever it represents, will show more in the numbers. That's where I was coming from.

Noted your point. Depreciation anyways is not that big a cost for us.

What you see in GAAP numbers, that depreciation is nothing, but is the lease rent. Because of the accounting standard, it is split between interest and depreciation.

Sir. Thank you.

Thank you.

Hello. I hope I'm audible.

Omkar.

Firstly, congrats on a good set of numbers and thank you. My question was on your membership.

I see that your Black Card member

Can you be a bit louder, Omkar?

Hello. Am I more clear now?

Better. Thanks.

Yeah. My question is about your membership, the people enrolled in your membership.

You have 13.8 million people basically. How much are the active members, monthly active members or yearly active number, or something that you can help us with for both Black and Silver membership cards?

Broadly, Omkar, that number would be around anywhere between 3.5 to 4 million active members for the year.

For the year. Yeah.

This is for Black and Silver combined, like all the membership cards combined?

Out of that 13.8 which we discussed as a number. Around 3.5 to 4 million would be yearly customers would be coming.

Okay. Also now, since you're also trying to move SS Beauty online, with the website and all, how much of the sales are you already expecting to come from online, purely standalone online business?

Omkar, the approach for us is not looking at it as online or offline, as omni, so that's one. We expect the online part of that omni business to be, in the next couple of years, to move up to around 8

to 9%. 8 to 9, sorry?

8 to 9?

Percent of the business.

For SS Beauty only, yeah. Yeah.

Thank you so much, sir.

Good morning to everyone. Am I audible?

Yes, please.

Hello.

I have been tracking Shoppers Stop for the past four

quarters. By observing your numbers, except every December quarter, you are able to achieve ₹1,400-odd crores in sales.

Rest of the quarters we are always around ₹1,060 crore to ₹1,200 crores. Despite you are on the expansion spree, your sales numbers never gone up.

If you're not able to show growth in the top line, how can you improve the profit and how can you give value to the retail investors like me? For two and a half years, you have no growth, negative growth further.

Okay. There are two parts to this question.

You said that we are on an expansion spree. That's not the case.

We opened about two stores in Q1, and we'll continue to open stores where we see the financial feasibility.

No, I am talking about 9 to 10 stores every quarter.

Let me answer your question. The business has seasonality.

For the top-line growth, there is a healthy growth that we have reported, 10% overall, 6% like-for-like growth. The business is growing even for the like-for-like stores.

Whatever incremental stores that we are adding is only adding to the growth. The overall EBITDA also has improved if you see our numbers, the cash generated from operations is also healthy.

Which part of the business probably concerns you, if you could be a little bit more specific?

No. You said every segment, whether it is a beauty segment or Intune or everything is showing growth, but the sales numbers never go in the three quarters, it never able to cross the maybe ₹1,300 or ₹1,400 crores.

It never able to push that margin. It always stagnated around ₹1,200 crores.

See, right now we have reported our Q1 numbers, which have shown a very good growth. There will be a specific seasonality in our business.

Certain quarters will typically high, considering the nature of business. I'm sure you'll see a consistent growth in the coming quarters.

Okay. One last question that there is a monsoon that is not up to the mark.

Do you

Monsoon, right?

Yeah.

No, that will not impact us. We don't get affected.

Fine then. Thank you.

Thank you. A reminder to all participants,

Yeah. Hi, sir.

Good morning. Thanks for the opportunity.

Sir, in your opening remarks, you talked about two Swiss brands that you'll be launching exclusively. Just wanted a bit more color on are these brands entering for the first time in India, and what kind of a price point will they be playing?

If you can provide some color there, thanks.

Good morning, Sunny. These would be exclusive in India.

They are entering India first time, and the mean or the median pricing for them would be anywhere between ₹1 to ₹1.5 lakh.

Sir. Then, sir, by when does the actual launch of this brand, FY27 only we'll be launching?

No,

we'll release this quarter, Sunny.

Okay. Already launching, okay.

Got it.

No, we will launch in Q2. In Q2, we will launch.

In the next 2 months, you will hear the announcement.

Sure, sir. Very clear.

Thanks.

I just wanted to thank everybody, to all the listeners, the participants to join us for this conference, and look forward to interacting with you next quarter. Thank you so much.

Thank you.