Thank you, Renju. Good morning and thank you all for joining us on the Shoppers Stop Q3 and 9M FY26 earnings conference call.

Today, we have with us the senior management represented by Mr. Kavindra Mishra, Customer Care Associate, Managing Director, and Chief Executive Officer; and Mr.

Karunakaran Mohanasundaram, Customer Care Associate and 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 discussion in today's earnings 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's 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, Premkumar. Good morning.

I have Karuna, JP, and Rohit with me. Biju and Devang will join me later.

We have uploaded the investor presentation on our corporate and stock exchange websites. Let me start by talking about the operating environment during the third quarter, which, quite frankly, was more sluggish and muted than what we had initially expected going into the festive season.

Consumer sentiment throughout the quarter remained cautious. We saw demand getting impacted by a combination of factors.

One key issue, especially in North India, was the high pollution levels during parts of the quarter, which kept customers indoors and had a direct impact on footfalls and discretionary spending in some of our important markets. We had also expected a stronger demand pickup during GST reduction.

While there was a visible spike immediately after the reduction, that momentum did not sustain beyond the initial period. The broader uplift we were anticipating did not really play out over the rest of the quarter.

If I break the quarter down month by month: October post-Diwali was relatively soft. Diwali demand itself was reasonably good, but the festive season shifted earlier into October this year.

Once Diwali was over, demand tapered off sharply, as a result of which our like-for-like sales declined in October. November showed some improvement.

The first half of the month was slow, reflecting an overall market slowdown post festivities. However, demand picked up meaningfully in the second half of November, driven largely by events like Black Friday, which helped drive footfalls and conversion.

This resulted in a like-for-like growth for the month. December, however, was a disappointment.

Given the early Diwali, we had expected a stronger December, but that did not materialize. Consumer spending stayed muted, and December ended up being largely flat on a like-for-like basis.

Overall for the quarter, like-for-like sales declined in October, grew in November, and were largely flat in December, resulting in flat sales for the quarter. The early festive shift, the broader market slowdown in the first half of November, along with economic factors and environmental issues like pollution, collectively weighed on demand during the quarter.

This also impacted our overall business. Similar to previous quarter, I will start with the core performance, and then I will dwell upon InTune and new businesses, capital allocation, including working capital and way forward for the fourth quarter, and beyond on our recovery plans in detail.

Let me talk about the core businesses. As I mentioned last quarter, our premiumization journey has been progressing really well, and that momentum continued throughout this quarter.

Wedding with Shoppers Stop was a huge success, and along with the introduction of several new premium and premium-plus brands, helped us move the premiumization mix from 65% to 69%. What we focused on in Q3 was building on what we'd already put in place, while also adding a few incremental initiatives to further strengthen the premium play.

We see a steady increase in the share of non-apparel categories, which tells us that customers are increasingly engaging with us beyond just apparel and trusting us across a wider set of lifestyle needs. From a profitability standpoint, we are encouraged to see consistent improvement in GMROI for both premium and premium-plus brands.

This reflects better brand selection, share of buying, and improved inventory productivity. Overall, these efforts are helping us elevate the customer proposition and position the business as a more premium multi-category destination while continuing to drive healthier returns.

Let me give you some snippets and the results of what we did. We launched India Weds with Shoppers Stop, and it has gone really well.

Sales from this campaign came in at ₹104 crores, which was up by around 160% over last year. When you walk into our stores now, the vibe is just better: more international brands on the shelves, fixtures that look sharper, and services that feel more personal.

Our Personal Shoppers have played a big part in this, with their contribution climbing from 23% to 27%. Of course, our First Citizen membership keeps growing strong, driving loyalty sales that now stand at 84%, proving how much they value being part of the family.

Our First Citizen members cumulatively stand at 13.3 million as of end of quarter three. Let me share some numbers that reflect our execution strength.

Customer entries grew by 5% despite a challenging operating environment. New customer acquisition remained strong at 40% of total customers.

Key KPIs continue to show healthy trends, with ATV at +7% and ASP +7%, while IPT remained stable. The loyalty saw its highest ever enrollment during the quarter for Black Cards, which was around 38,000, while Silver Cards sign-ups were at 220,000 cards, which was 8% growth over last year.

We launched several new brands during the quarter, including DKNY watches, Prada eyewear, Marks & Spencer and U.S. Polo Assn.

in apparels, Everlite and Candere in jewellery, among others. Overall premiumization improved by 6% during the quarter.

Despite the above, our sales largely remained flat due to operating environment, which I discussed a few minutes back. Our EBITDA before one-off costs dropped by 24%, mainly because we have been spending more on customer acquisition, running bigger marketing campaigns, and putting extra money into improving the tech behind our website.

While that hit our short-term numbers, these are deliberate investments aimed at driving growth and strengthening the business for the future. We have also considered an additional cost of approximately ₹17.5 crores arising from the revision in labor codes.

Given the materiality of the impact, it has been included as an extraordinary expense in line with recently published ICAI guidelines. Let me talk about the new businesses, starting with InTune.

I have said this earlier, we are consciously investing in products, sourcing, and brand building, and we are encouraged by the way the business is shaping up. Having said that, the broader value segment saw a fairly tough quarter, with muted demand conditions across the market.

Post the festive period, there was a noticeable and sharp drop in conversion, which did weigh on overall performance. The marketing environment also remained challenging, with higher noise, deeper discounts, and pressure on spends.

Despite these headwinds, our festive period performance was resilient, delivering a 4% like-for-like growth. While the near-term environment remains uncertain, we remain focused on strengthening the fundamentals and are confident about the medium to long-term opportunity.

Let me clarify our new businesses, including both InTune and the new website on beauty. The losses include for both, with nearly 1/4 of losses coming from ssbeauty.in, primarily due to tech and customer acquisition costs.

As I mentioned earlier, the short-term losses we are seeing do not reflect the true potential of the business. These are the functions of that investment we are making at this stage to build scale and capability.

I will share a more detailed view on our plans and the way forward in my concluding remarks. Let me talk about the beauty business.

Beauty sales grew by 14%, driven primarily by fragrances, which grew 12%, along with strong performance from our distribution business, which supported overall growth. As in previous years, we continue to engage actively with consumers through multiple initiatives during the quarter.

We also expanded our physical footprint by opening eight shop-in-shop locations, enhancing accessibility and brand visibility. Looking ahead, our focus remains on delivering a personalized customer experience through technology.

Let me talk about the distribution business now. Our distribution business delivered a very strong performance during the quarter, with revenue of ₹122 crores, growing by 58%, reflecting both the strength of our portfolio and improved execution.

We achieved revenue of ₹122 crores in Q3, which effectively means a run rate of ₹500 crores and above per annum. Global SS Beauty continued to expand its brand offering with the addition of new brands such as Playboy in fragrance and SimiHaze Beauty in makeup, which have been well received in the market.

E-commerce remains a key growth driver for the business, and we are further strengthening this channel by expanding existing brands across new platforms, while also onboarding additional platforms. We're also seeing deeper penetration with our existing customer base, which is helping drive consistent growth.

The launch of EuroItalia brands in September has been encouraging, with healthy sell-through so far, reinforcing our confidence in the long-term potential of the distribution business. This marks a significant milestone in our strategic focus on beauty as a high-potential growth engine for Shoppers Stop.

Capital allocation: We have been quite disciplined and cautious on capital allocation this year, keeping a sharp focus on returns and balance sheet strength. During the quarter, we opened three departmental stores, three InTune stores, and one HomeStop store.

As a result, the total capex incurred stands at approximately ₹90 crores, all of which has been funded through internal accruals. Looking ahead to Q4, we plan to open another four to five departmental stores, three InTune stores, and two beauty stores, taking the total number of new departmental stores added during the year to nine.

I'm happy to share that all the departmental stores opened during this year have performed exceedingly well and are tracking ahead of our expectations. On the balance sheet front, our net debt currently stands at around ₹90 crores, which is lower by ₹159 crores versus the year-end position.

We expect the net debt to close the year in the range of ₹150 to ₹160 crores, which would be nearly ₹100 crores lower than last year. This improvement is largely driven by a focused effort on reducing inventory, which is reduced by ₹122 crores across verticals without compromising on availability or growth.

Going forward, we will continue to balance growth with prudent capital deployment, maintain tight controls on working capital, and ensure that the new store additions and investments are aligned with long-term value creation. Way forward: I will start by saying that we are very clear that Q3 has been an exception due to festive shift and higher level of pollution.

We are confident of bouncing back from here. We have seen this play out before: even in FY25, sales declined in the first two quarters, but we saw a strong recovery over the next four quarters, and we believe a similar trajectory is possible this time as well.

Let me address the elephant in the room on InTune and the way forward. We have been getting a lot of calls asking whether we will continue with this business or not, and the short answer is yes.

We genuinely believe the worst is behind us, and more importantly, value-added business will drive meaningful profitability gains while, more importantly, building a strategically important portfolio for Shoppers Stop. Let me talk about inventory first.

We have made solid progress. We started the year at around ₹100 crores, which is now at about ₹70 crores, and by the year-end, we should be close to ₹60 crores in inventory.

A big part of the risk has already been taken out. Secondly, we have already absorbed most of the inventory-related pain.

We took roughly ₹10 crores of provisions mainly in the first half. Those numbers have come down quite sharply now, which tells us the legacy issues are largely done.

Third, and this is important, we are entering spring-summer with completely fresh inventory. Stores will be filled with new merchandise, and that changes the story materially in terms of sell-through and margins.

Fourth, we have gone store-by-store on profitability. Where we feel the turnaround will take too long, we will take clear calls on closures before mid-next year.

We don't want capital stuck in the wrong places. We believe that the value fashion market itself is large and still under-penetrated, but to be clear, we did face demand issues as well, driven by the product mix, freshness, and price-value equation.

With fresh inventory and sharper assortment, we believe demand will normalize. From a number standpoint, yes, this year will close with a loss of about ₹60 crores, but Q3 losses have reduced significantly versus quarter two despite the festive shift.

Next year, we expect that to come down meaningfully to around ₹20 to ₹25 crores, and even after overheads. From FY28, we expect the business to turn profitable.

For us, we believe that Q1 FY27 is really the inflection point, and both the board and the management are confident that the story will start looking very different from here onwards. Now I will discuss the core business.

We continue to execute our strategy meaningfully to elevate our store portfolio, with clear focus on the premium and bridge-to-luxury segments. The launch of our Juhu store on January 14th marked a key milestone, positioned as one of India's most premium experiential retail destinations.

It reflects our long-term commitment to curated, differentiated customer experiences. Looking ahead, we will further expand our premium footprint with the opening of state-of-the-art stores at Pune Pavilion and Zora, Raipur in Q4, supporting sustainable growth and brand elevation.

Our immediate priority is improving conversion. With customer entries already trending up, even a modest improvement in conversion can drive overall sales in a geometric progression, and this remains a key area of action for us.

We will continue to drive the business through Personal Shoppers and plan to invest further in the capability this year. We expect the contribution from Personal Shoppers to improve by at least 200 to 300 basis points over time.

A critical area for us is improving supply chain efficiency in our private brands, particularly Indian womenswear. This was the primary reason for the dip in revenue and profitability in Q3, and corrective actions are already underway.

Non-apparel continues to be a strong growth engine for us, having grown at double-digit rate for the last few quarters, and we are continuing to sharpen our efforts in this category. Customer acquisition has been strong, and we intend to build on this momentum through multiple programs and initiatives to further widen the funnel.

Our loyalty programs has delivered excellent results, growing significantly over the last year. We believe that this remains as a key pillar of our strategy, and we will continue to strengthen it and drive it over the coming year.

On capital allocation, finally, we will remain prudent and disciplined. Alongside growth in investments, we will continue to reduce working capital.

As I mentioned earlier, the stores opened during this year have been performing exceptionally well, which gives us confidence in our expansion strategy. To conclude, I would like to reiterate that Q3 was an exception.

We are confident that with the actions underway, we will see a clear turnaround over the next two quarters. Thank you.

Should I open the floor for questions?

Yeah.

Hi, good morning, sir, and thanks for taking my question upfront. Firstly on department stores, am I audible?

Yes, Sameer,

you are. Firstly on department stores, we have had around five closures this year, if my calculations are correct.

Last year, this number was nine closures. Now, persistently, with the exception of few years, we have had fairly decent amount of closures every year in department stores.

Now, could you first elaborate the reasons for these five closures that happened this year? Because I remember last year, we had said that we are towards the end of the journey of closing stores and going forward, the closures will be more like in the normal course of business.

If these are the normal course of business, going forward also, should we expect similar amount of closures?

Okay. Sameer, thank you for your question.

I think, as I mentioned last time as well, we are in the process of cleaning up of the tail, right, which we felt are important, because the stores which are of a certain size and profitability don't make sense for us to continue. I think we made a lot of corrections there.

We definitely have made corrections this year as well. If I talk about, for example, we have shut our Ludhiana store, but we have opened a larger and a better store in the same market.

Some of these actually, like the Bata Chowk, Faridabad, or Ludhiana, are our stores in the same city or catchment, we have opened a better-looking store and replaced this store. I think when we see this five stores being closed, few of them come from that perspective.

We have a very active mechanism of looking at the stores which profitability sense or not. I think, as I mentioned last time, the heavy lifting has been done, Sameer.

Three to four stores is quite a possibility in a business where markets keep on changing or we keep on getting a better opportunity in the same market, like we did in case of Ludhiana, or in case of Faridabad. Incidentally, wherever we are opening or shutting the old, run-down store and opening a new store, the performance continues to be more accretive both in terms of profitability and returns to the business.

Now what you are seeing is also correction of the market. It is not that we are vacating the market.

We are opening a better store and opening stores which were at one point of the time relevant in some market which are now moving out.

Sir, if these are largely relocations, then I should only be looking at the net store addition. There also, we are down to by two department stores this year, if you look at the net one.

If large part of the additions are happening via relocations, we're then not really adding a lot of stores, right? No,

so as I mentioned, the stores which we have opened this year, and if I can take you through them, Ludhiana is a replacement, okay? Manikonda is a complete new store.

We have opened a store in Hubli, which is a complete new market. We have opened Rajahmundry, which is a completely new market.

The balance four stores which are opening between four to five stores which we are going to open between January end and March are all new stores.

Got it, sir. These relocations are largely your high street stores, because malls, there's no real point of relocation unless the mall is shutting down, right?

It's split. For example, Faridabad was a high street, and we opened in the mall.

On the other hand, the Ludhiana which we did, we moved to a stronger high street, because the mall had become irrelevant at some point of time.

Got it. Got it.

If I can just ask you the mix of high street versus mall stores in department, would you have it handy?

It would be I think 80% mall stores and 20% high street stores. One thing which I wanted to maybe for your comfort and for everybody who's on the call, the quality of stores which we are opening in terms of the mall stores, or any stores which we are opening now, have the potential to be far higher than the averages which we have opened in the recent past.

We are now signing up stronger, bigger properties which have the right to win in the markets in which they are. I think that has been one mix we have now changed, and you would see that paying out very nicely over the next few quarters.

Sure, sir. All the best for that.

I think 35,000 sq ft is what you have mentioned in the PPT.

Yeah.

Okay. Second question, last one from me: gross margin contraction of around 110 bps this quarter.

Now, in a quarter where premium has done well and winters in general have been harsher, plus you mentioned InTune provisions have come down, what really explains the GM contraction this quarter?

Thanks, Sameer. That's a fabulous question.

Though the InTune provisions have come down, the end-of-season sale in InTune started earlier this year. Out of this 110 basis points, almost 50 basis points is because of the InTune lower margin this year.

Last year, InTune end-of-season sale started in the last few days of December, whereas we started almost 19th, 20th of this year. That's one.

Second one, the private brand, because of the reasons what Kavi explained, both the overall mix and there has been a slightly higher provision in private brand, and that's impacted almost 40 to 50 basis points, Sameer. These are the two large reasons of 110 basis points drop versus last year.

Got it, sir. One last question if I may squeeze with your permission:

Go ahead.

When I look at department stores, footfall growth is decent, average ticket value is growing, the problem then the only thing left is conversion. For a retailer which is largely third-party, improving conversions is not really in your hands, right?

People come to your store with the, the Shoppers Stop pull is to drive footfalls, and from there on, conversion is a function of the merchandise. If the merchandise from the third-party retailers is not exciting, third-party brands, then it's not really in your hands.

What I'm trying to ask is that is it also a sign that brands are also focusing more on opening their own EBOs, because any mall that you go, you'll have a Shoppers Stop, but you'll also have brand EBOs who are selling in Shoppers Stop in the same location, and the merchandise available at Shoppers Stop is lacking in depth or is sub-par in any way?

Sameer, I don't think that's the reason, because brands continue to have multi-channel, and I think if you speak to brands, they will tell you that they have grown really well with Shoppers Stop versus the other channels in which they operate, including their own. For us, Indian wear, especially private brand Indian wear, is one of the biggest recruitment categories, okay?

That actually has a larger-than-life play in terms of conversion. Obviously, there are a couple of more things: how to drive your Personal Shopper thing, but we feel that somewhere because of the stock issues there, we have been able to miss out.

Obviously, there are a lot of other reasons for that, and it's more operation-driven and internally, and nothing to do with customer per se or the brand mix, because if you ask the brands, we have performed very well for most of the brands. My sense is that, one, the unavailability of our key private brands in terms of stock being very, very low versus last year, I think that was a big issue for us.

I think also because more and more new customers are coming in, and as I mentioned, 40% of the bills which are coming are through new customer, their conversion tends to be a little lower than the thing which has happened. I think it's a fundamental question of that, Sameer, rather than because brands have been opening EBOs for the last so many years, right, and that doesn't answer this drop.

We are very confident that that we'll be able to do that. We've already done some work streams to work on that to ensure that while the customer entry keeps on growing, we are also able to drive conversions up.

Got it, sir. Thank you so much for answering all the questions so elaborately.

I'll come back in the queue for any follow-ups. Thanks a lot.

Thank you.

Thank you. Good morning, sir.

My question is on the growth front. Despite the strategic focus on premiumization and also refocus on value segment, we are not kind of seeing consistent growth, right?

Somehow we are missing that growth momentum. Even like-for-like growth also is negative.

Just want to understand what is missing here, by when can we see a consistent growth going forward, given the strategies which the company is

following? Thanks, Ashutosh.

If I look at, let me step back and answer your your query in and break it into different businesses so that it becomes easier for us to answer your your question. If I look at the departmental store, the last three to four quarters actually, if I if I keep Q3 aside, have been rather good.

I think we have been having a consistent mid-season or mid mid-single-digit like-for-like growth, and even actually the Q2 was close to 9 9.5%, right? We did and we had a flat Q3 for departmental store business.

As I said, there were some issues on conversion, which is led more by internal operational issue. There there's obviously a shift of the festival, Diwali this year this quarter versus last quarter last year.

There were some issues in in in North, which we mentioned. Some of our big stores, like, for example, Juhu, was under renovation for the entire Q Q3, which has also impacted part of the business, and you will see the recovery happening there.

Otherwise, actually, if you look at it, YTD we'll be close to 4.5% to 5% like-for-like growth. It's not that, and I think when we started the year, that was one thing which we commented that we will be between 4.5 4.5% to 5% like-for-like growth for the year.

I think we are sticking to it. Definitely you are right that from the 9% or 10% which we did last quarter, we have come down to a flattish number this time, but as I mentioned, that is an aberration.

We don't see this happening, and the secular growth of 5% will remain. I think the important thing is that when will our new stores start kicking in, because rightly so, the overall growth should not be limited to five.

It should be close to the to a high single, and I think that's where we we have to make our new stores sweat harder, and whatever needs to be done to ensure that that happens, we are doing. Beauty, we have spoken about that beauty the business is growing and is doing really well, powered by fragrances and Global SS Beauty.

In case of InTune, which is actually the the place where we said maximum growth should happen in terms of the top line, we did have a 22% odd growth this quarter. Should have been far, far higher, because the bases are very small in this in this business right now.

We were struggling with the inventory issue, which we have just shared. My sense is key Shoppers you will the departmental store business you will start seeing back in action from this quarter onwards.

Beauty continues to be strong, and InTune, as we mentioned, it is Q1 of next year when you will see the profitability as well. I think one good initial opening sign is that the for the festive, InTune grew by 4% like-for-like.

I know these are very small wins, and in the larger mix, it doesn't reflect in the right way, but very, very confident that we are in the right direction, Ashutosh.

Sir, that is very helpful. Just to clarify, I understand the demand situation and the festive shift, all those things.

Just to clarify, there isn't any slowness or not slowness exactly, but any internal issue which is impacting the growth, right? Just to clarify on that thing.

Because as you mentioned, just for example, InTune, it grew by 22%, and if we see a peer like Trent, their growth has also moderated, but still on such a high base, they have delivered almost 17% growth. If we compare, something is not actually adding up, right, given your focus and all those things and a very very small base, still only 22% growth.

No, no, it should be much higher. I completely agree, Ashutosh.

I did mention about the inventory and the freshness of the inventory not being there, especially for InTune, which I also mentioned that by this summer, we should be 100% fresh. As we enter the season in March end, I think it's more to do with the inventory in the stores, which we have been able to remove now, and we are in a much better situation in terms of inventory, as we speak.

You will see the growth. I think at the end of the day, for a business which is on product, if the product freshness is not there, it will definitely impact.

If you ask me what should this number, this number should have been 65%, 70%. It should not have been 20 22%, right?

What I think was a similar number which we achieved in the quarter before. This will go back to that number.

It is a question of inventory freshness, where I think we have done a lot of heavy lifting and cleaned up the stuff. The inventory which used to be ₹100 crores has now come down to ₹60 crores, and that is why it has come down to that ₹60 crores by liquidating old merchandise and making it fresher.

I think the customers, when they enter the InTune stores, will see a far fresher and cleaner inventory and relevant inventory than seeing things which are old.

Understood, sir. That is helpful.

Just one last thing: so what kind of revenue growth we should expect in FY27? For the overall business?

I would say we are working on those numbers. I would say, including both organic and inorganic, we would expect a mid-teen growth.

Hello? Did you hear me?

No, sorry, sir. I could not hear.

No, I said we are just working on those numbers for the next year budget. The initial estimate seems to be a mid-teen growth, say between 12% and 15% for the next year.

Sir. Thank you.

Thank you, sir.

Good morning to the team, and thanks for taking my question. Most of the questions have been answered, I just want this clarification on the InTune.

Am I audible now?

No.

Am I clear now?

Sort of. Can you speak slower and louder?

Sure, sure. Most of the questions have been answered, I just want one more clarification on the InTune format.

The management commentary mentions a calibrated approach and measured expansion for the InTune value format due to subdued discretionary demand. The plan for quarter four is to open only three more stores reaching a total of 84 despite the format delivering 22% YoY sales growth this quarter.

The question here is, is the moderation in InTune openings a permanent pivot in strategy due to unit economics not hitting the initial IRR? How does the company plan to compete with other aggressive value fashion retailers if it is slowing down its footprint since that's how the format gains scale?

Great question. I will request Devang to answer this.

Thank you, Rihan, for the question. I'm sorry if I have misunderstood.

I will try and answer as per my understanding. The growth in Q4 being restricted to three stores is largely on account of what Kavi mentioned in his opening remarks, that we were trying to get our current operating business sorted out in terms of the legacy inventory problems being solved and the growth of the operating stores being brought back to expected levels.

Once we see a quarter of our expectations flowing through, the previous pace of expansion will again catch up. I think this is more internal than external, if that is what your question was.

Yeah. Thank you.

All good. Thank you.

Just one clarification needed. In one of the questions, you answered that in FY27, we are expecting InTune losses to be ₹25 crores.

In another question, you mentioned from Q1, we will see break-even. Can you clarify what will be the FY27 EBITDA PAT loss of InTune and when will the break-even happen?

Hi, Ankit. I think between me and Kavindra, we'll try to answer.

What I mentioned was that the expected losses for InTune for the business would be around ₹20-25 crores for FY27. When I said Q1 is really the inflection point is when we will start seeing a big shift in terms of the performance and consequently the EBITDA.

I think just to give you that sense, we expect that FY27, the entire business would be and when I say ₹20-25 crores, that includes the head office cost as well. As in the entire business, not the store profitability.

This is a PAT loss, not EBITDA loss, right? When you say break-even, you are expecting EBITDA break-even and not PAT, right?

That's right, Ankit. See, between EBITDA and PAT, the difference is only on account of depreciation.

Other than that, yeah, when we can allot notional interest, other than that, it's only the depreciation. It doesn't make a significant difference.

It's primarily EBITDA. To answer your question, it's in EBITDA.

Sure. My second question on the store opening for InTune: what are we planning for next year store opening?

Because if I look at a two year back, then we reduced it to 30, 35, now we are going to close at mid-teens store opening for InTune. Next year, if the SSG doesn't come, what we are anticipating, will the store opening still be sub-30 stores or we will still expand given the inventory correction is already happened?

Ankit, I think two parts of it: one, the current focus is to get all the models across inventory and supply chain right for this set of stores, right? As I mentioned, Q1 FY27 is where we see everything playing out in the right way for us.

Basis that, I think we will have a much stronger opening plan in H2. You need to give us some time to come back on, because we don't want to commit a number and then we have seen that experience this year, and I think we would rather be a little shy around that.

I would rather get the team to deliver on what we are supposed to do as a team, because if you are able to do that 75 stores well, that itself will be a big big turnaround for us in profitability. Then with the engine of store opening we have got, I think we can open multiple stores.

I don't think that's an issue for us. Right now is to first get the inventory right, which I think very confident that end of March, we should be in that situation, and that's the feedback I get from the operational team as well.

Let me first sort that out, and then we move into the thing about expansion. Initially, Q1 also will be very moderated next year in terms of store opening.

I see more expansion happening in H2, but I think Q1 end, we will be able to answer that question better. Because the turnaround time for InTune for us is very, very short vis-a-vis departmental store, and the opportunities, and since we have already mapped the market, we know what stores to open and where.

We just want the current set of stores to get fixed first.

Sure. My last question is on departmental store.

For last three, four quarters, we have focused on premiumization. If you look at a Juhu store, or Inorbit store in Malad also, it's more high-end, more premium also there, right?

What is the kind of customer profile is Shoppers Stop targeting with these premium brands coming in? Do you think the footfalls which you are garnering are youth or 30, 35 age group who have the money to spend on these brands today while the younger audience is going towards more value fashion?

I think we are very clear, and I think, Ankit, you're bang-on on this. For us, our key customer base is 30, 35, and that is where we want to focus on.

The young families is what is our stated ambition and as also our vision statement, and we just want to be focused on that. Now, you spoke about both Malad and Juhu.

While you will find that there are premium brands in Malad and experiences, but you also have a good mixture of bridge-to-luxury and you have got premium brands in Malad. On the other hand, Juhu, which is a more differentiated kind of a neighborhood, you have much, much more premium set of brands there.

What we are seeing in both the cases, as we've done the renovation, and it's too early for Juhu, only a week or so, but we are seeing a 35% to 40% uptick in numbers. I think as long as we are able to meet the customer requirement, and I think the important thing is that as our customers have also grown up in their aspiration, and we continue to ensure that we also improve the quality of brands and the kind of brands we have in our system.

Young family, 30, 35 years, premium, I think that's very clear as a business strategy, and I think it's working out well for us. If you look at even this quarter, while the overall or the like-for-like for department stores is flat, for premium-plus set of brands, it's 9% or 10%, and for premium brands between 2% to 3%.

What we are seeing is clearly there is a set of brands which are performing better in this portfolio, and it is no longer that the premium-plus is a small part. It has gone up to as high as 25% for us.

We are seeing across, and non-apparel especially is leading that big change for us.

Sure. One last question for Devang.

Devang, market leader Zudio, their numbers are out. Seems like their like-for-like growth is high single digit, hit tail.

We are not performing. Other listed players, in the value fashion market, why suddenly a slowdown here?

Is it competitive intensity? Is it inventory, for you was a issue, similarly for peers?

Where do you see the challenge lies for all the value fashion players, or their new customers are tired and now wanting to go shop somewhere else?

Thank you, Ankit. The question is quite reflective in nature, I'll try and give my point of view, and I will obviously not be able to comment on a competitor's performance at this stage.

I think in the near and long term, the value fashion space is very, very lucrative. I don't see the space slowing down.

There could be some hiccups in the short term. All I can say is that as far as InTune is concerned, we fell into that cyclical problem of legacy inventory slowing down freshness, freshness slowing down the promise that we made to the customers, resulting in top line issues, which, as Kavi said, we've addressed.

I think towards the end of Q4 and in Q1, we will see our freshness promise really fulfilled and the numbers coming back. I don't see the segment itself under any kind of duress.

That's my personal view.

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

hi, Kavi. Thanks for taking my questions.

Sir, first I wanted to understand, you mentioned focus on working capital optimization. We understand there is a certain innerwear brand that we've exited also.

Is this also more to do with the working capital management thing that you sort of alluded to? If that's the case, I also wanted to understand what is the size of business that we've sort of exited to optimize our working capital?

Can you just summarize your question? What do you mean?

I think it was a little muffled. If you can, may I request you to

Am I audible

now? Go ahead.

I was indicating that you mentioned focus on working capital optimization, and we understand that we have exited the leader in the innerwear space. Wanted to understand Innerwear

brand, yeah.

Is this also more to do with the working capital management and what was the size of business that we have sort of exited from that perspective?

No, hi, Devanshu. No, I think the brand which you are referring to, we don't remove performing brands because of working.

I don't think we are at that stage or is there any issue of working capital there. It was more to do with the commercial terms which we had agreed to and there was desire of the brand to change it, which we were not comfortable with.

I think the business for that brand is even less than 1% of our revenue, I don't think that's an issue. In fact, to add, we have also been able to successfully convert a lot of our OR brands into SOR, which has actually added to a stronger working capital statement.

The brand whom we have removed from our thing, we have been able to replace in a lot of places that brand with Marks & Spencer, which is a premium brand portfolio which we have added. I don't think that decision was anything to do with working capital.

It was more to do with the commercial terms, which I think we had a difference of point of view, which is fine. Brands will have a point of view, we'll have a point of view.

We have to see each other's interest and see what works, what doesn't work. Just to give you a sense, we don't take these decisions on basis on working capital.

Yeah?

Fair enough, Kavi. Is this the only brand that we have sort of exited because of the differences on opinions related to commercials, or there are few that we have exited?

This is the only brand on difference of commercials. Otherwise, because we at this point of time have the ability to have the best, and I think it's a blessing which we have from our customers.

There are a lot more brands who want to come inside and whom we don't have a space. As a process what we do is we continue to churn the brands.

I think one of the most important thing is to speak to the customers and get a feedback from them what kind of brands they want within our system. To give you a sense, more than 100,000 customer voices are collected every month.

We share with them the kind of brands we want to introduce, take their feedback and get them. I think churn is something which we will continue to do.

Thankfully, the brands continue to support us in a very, very strong way. Given also the fact that at this point of time, for a premium, super-premium, bridge-to-luxury, we are the only relevant partner at this point of time.

Yeah?

Fair enough, Kavi. Last question from my end, I wanted to understand is there a growth divergence across categories as well for you, or most categories are seeing sort of regular kind of growth similar to the company average?

Sorry, Devang, again this question got muffled. I'm sorry, but can you repeat this?

Yes, definitely. I'm apologies if my voice is not clear.

I was asking if there a growth divergence across categories that we offer to customers, or most categories are seeing similar to company average growth?

No, so, for example, the non-apparel categories have done really well. If I talk about watches, handbags have done exceedingly well.

In fact, they are double-digit like-for-like. Beauty, especially fragrances, has done really, really well.

Women's western wear as a category has done really well. I think one category which didn't do that well was Indian wear because of shift of festive, right, because I think that's something which suffered.

We also feel that men could have done better, the branded men this quarter, and that's more to do with some amount of churn happening in the brands, I think which I believe that is getting stabilized as we move into this quarter. Clearly, non-apps is a big winner.

Fair enough. Thanks, Kavi.

Thanks for answering my questions.

Thank you.

Thanks for the opportunity. I have a question.

The beauty distribution business doubled its revenue to ₹106 crores this quarter. As you scale this segment with global partner, how does the margin profile and working capital requirement for distribution compared to your SS Beauty retail EBOs?

Deepali, your voice is not clear. Are you asking that for Global SS Brands, how do we manage working capital?

What's your question?

For distribution business, how you manage the working capital?

Okay. Distribution by definition is a high-intensity working capital, Deepali.

We do hold anywhere between 16 to 20 weeks of inventory. We are also funded largely between six to eight weeks.

The net inventory would be 12 weeks, and that is taken care of in the margin part. The churn of the inventory is also very high in beauty business.

Overall, if you see the profitability on the distribution business, you can see that it's highly profitable. Most importantly, when we import the multiplier, what we call the price what we import and the price what we sell it to our customers, there is a significant difference and that's the way we make the profit, Deepali.

Got it. Sir, private brand sales grew by only 3% and their contribution to the apparel business stand at 17%.

Given your focus to sharpen brand portfolio and design collection, why is this segment lagging behind the overall core business growth of 7%?

Deepali, if I understand your question is why was the PB or private brand business slower in Q3 versus the business? Is that what you are asking?

Yes, sir.

Okay. Deepali, basically the private brand business for us, a large part of it is driven by Indian wear.

Because of the festive shift, because Diwali this year versus last year, the the the dates were split across this year across September, October versus entire October last year, we had a little bit of a loss of sales there. Also, as I mentioned, we had some availability issues in in in our leading brand called Kashish, which actually led to this.

Otherwise, if you if I look at other parts of the business of private brand, they are more more or less they did fairly well.

Yeah. Sir.

One last question, what is the conversion percentage of customer entry?

The conversion, okay, for our departmental store business, the conversion is around 18%.

Okay. For beauty?

No, so as in this 18% is more or less for the entire departmental stores, beauty is a part of that.

Okay. Thank you so much.

Good morning, sir. Am I audible?

Yes, Amit, you are.

Thank you for the opportunity. Sir, congratulations at least YoY, QoQ ASP is increasing.

I appreciate. Sir, the question was connected to the labor code, how much of the labor code impact is one-time versus recurring, the ₹18 crores impact?

The ₹17.5 crores is a one-time impact, Amit. The recurring impact will not be significant because See, I'm sure you would have read the entire labor code, right?

It's on the one-time contribution to both gratuity and leave encashment, and the leave encashment itself will be reduced to 30 days from now. That's the rule as set.

As far as the gratuity contribution is concerned, the one-time impact is 17.5, and we are working on with the management how do we neutralize even if there is an incremental impact for the next year.

Sir, second question was post GST reduction, have any categories shown sustained elasticity or was the demand entirely front-loaded?

To be honest, Amit, we felt that this should have been the demand as I said in my opening remarks, the demand should have been throughout and not for a particular time, which is especially festive. Usme bhi what's happened is that we have seen that certain categories like watches, handbag and perfumes still have the sustained this thing, but if you ask me apparel, whatever impact was there was only till the festive.

After that, it has slowed down considerably.

Understood. Sir, last question from my side, do we do online and digital as well?

Of course, we have two apps, SS Shoppers Stop app and ssbeauty.in. There are these two apps which we have, and I think you must have seen the investments also which we are doing in both these.

If I'm not mistaken, last quarter, we said that we will be closing the, especially the SS.com change of the backend completely, which has actually happened. I think we should see some good results coming in this quarter on that.

Thank you, sir. That was from my side.

All the best for the future.

Thank you.

Hi, sir, good morning. Actually, can you explain in detail the inventory problem that you highlighted for InTune?

Hi, Muskan. I will try and give the overall sense, and then maybe Devang can detail it further.

When we were launching InTune, I think we had a very, very, very aggressive plan, and we were looking at close to 100 stores launch. Because of the soft demand, we actually decided to fix that piece first.

What that ensured was that we had a lot of inventory which got accumulated. Once the inventory gets accumulated and because the promise of any product business is freshness, I think that's where we started getting hit.

We actually did one big thing which was very different from last year was we took an accelerated inventory provision and we ensured that, okay, ensure that we are able to liquidate inventory as much as possible. When we started the year, we were sitting at around ₹100 crores of inventory in InTune, which for the number of stores, I think was a little bit too much.

We have been able to reduce it to 60. This is just to give you a sense of the overall picture.

Maybe Devang can add on how this inventory he feels will be able to turn around his business and the throughputs.

Thank you, Kavi. I think the inventory problem that we spoke of was largely confined to one season, which is Autumn-Winter '24, over and above the soft performance that Kavi spoke about.

Prior to Spring-Summer '25, we were launching every two months. It's only from Spring-Summer '25 that we started launching on a weekly basis.

Combining the three, four months buying period for outright private-label fashion with the two-month drop, we kind of had a chunk which was pre-committed on a bigger base than what we realized. All throughout the last quarter, we are just trying to get rid of the excess from Autumn-Winter '24.

From spring onwards, the excesses are not in place because we aligned our buying with the throughput that we were seeing. I think we've seen the worst of it.

I think going forward, the inventory problem is solved to a large extent and is not likely to resurface.

No. Actually, also wanted to ask what could be the reason that apart from this inventory problem, that you guys are not able to perform well in the value fashion segment whereas other players are succeeding in the same?

I think what we mentioned a few minutes back, the value fashion business is very dependent on consistent freshness being delivered to the customers. The freshness is a function of the right profile of inventory and not being choked with old inventory.

Since we had old inventory, we were not able to launch freshness as much as we wanted, which is affecting our top line KPIs, which stands sorted, and Kavi also mentioned in his opening remarks that the spring-summer season will see the stores full of freshness, we should see that cycle come back. Also keep in mind that we are practically in the second full year of operations, there is some bit of learning that we take as a business and we course correct.

Maybe as we go from this year to the start of FY27, again recoting what Kavi said, we will see a lot more stability in terms of business. Thank you.

What is the conversion ratio for InTune and capex per square feet?

Conversion stands around 18%.

Inventory per square feet, sorry?

We don't measure inventory per square feet. The capex is ₹1,600 per square feet, Muskan.

Sure. Thank you.

Inventory you can broadly take it as ₹1,600, ₹1,700 per square feet.

Yeah. Thanks.

Thanks for the opportunity. Sir, two things I want to understand.

While visiting Shoppers Stop stores, of course, excluding the flagship ones, still a lot of stores are not feeling as much premium as we feel while entering in stores of our competitors. The second observation is, of course, are we curating our private brands in serious, proper, better manner, as we are unable to understand how are we moving there and assortment there?

Shouldn't we be moving faster, more aggressive, or more agile in terms of changing our store looks, pushing private brands? Your thoughts on this, sir.

Thanks, Gaurav. I think first, you need to little bit detail to me that what is it that you are comparing us with, because it will give me a sense to answer your observation or to address your observation.

Otherwise, on an average, we do five to seven stores we renovate every year. I think as we renovate the old stores and as we open the new stores, you will see the premium version only.

I think that we are very clear. It's a function of what store comes when in the cycle, right?

Again, I don't know which store you're comparing us with, I cannot comment on that. On the other part, which is of the private brands part, obviously, private brands needs to be better.

In fact, both in our investor deck and in our call last time, we spoke about ensuring that private brands become more and more premium. Just to give you a sense, we have just launched Fratini Girls as a premium kidswear brand as a part of our private brands.

I think that's something which will now move to 60 stores. I think this is something which we'll keep on doing.

Now, if you're comparing a Juhu or a Tapasya store which we have, they are the flagships. Otherwise, you will see Malad and Malad-like stores coming in a lot of the stores which are renovating now.

You are right in terms of agility, but I think there's a five to seven stores which we look at as every year, and we will keep on innovating it. All the new stores as we open, they will be premium ones, right?

I would love to maybe offline have a chat with you that what is the feedback of the stores where you went to and which you feel the competitor brands, and maybe offline we can have a chat on that to understand your point of view as well.

Sure, sir. I'll get back online.

Thank you.

Hi. My question is regarding the strategy behind rationalizing the store sizes and now opening the stores in bigger size.

What is that? As all the peers in retail segment, it's a normal practice for them that they are closing down some of the stores and then rationalizing in terms of size and increasing the store size.

What is the strategy behind that?

Mr. Gupta, please come in the range and talk.

There's a lot of disturbance and then your voice is muffled. Now it's clear?

Understood, Karan, in short.

This

is

a simple question: the strategy behind rationalizing the store sizes and opening up in a bigger size. Just curious.

Understood, Karan,

and maybe if you can mute, because there's a lot of background noise, then I would be able to address this query of yours. Yes, you are right.

I think we decided to open smaller stores, and when we opened the compact-sized stores, we realized that a lot of categories are not getting fit into the business, and also the throughputs which we are getting from those kind of stores didn't make any sense, because we ended up typically having stores which are ₹18 to ₹20 crores of revenue for us, which doesn't make sense, because the effort which needs to drive a store is same whether it's a 30,000 sq ft, 20 or a 40, right? That is one.

Second, as a business, I think the two pegs on which we want to drive our business is premiumization and experience. For both the cases, if I talk about premiumization, you need to give the right kind of space to each of the brand to express themselves well.

If I talk about experiences, you need to have a kids play area, you need to have a proper Personal Shopper lounge, because that's our strategic direction from our side and that's what we really want to work on, a gaming zone. If you want to do all these things, give brands the size, then between 35 to 40,000 is what is the sweet spot for us.

We are not in the game of opening too many stores at ₹18, ₹20 crores of business. We are in the game of opening few stores, but the store should be ₹50 crores plus.

I think as we move into that strategy, we are very, very clear that this is what we want to do. A lot of retailers, and a lot of brands actually, by the way, are shutting the smaller stores and opening bigger stores and the best brands in the country simply because you need to do that, and I'm talking about premium brands here, you need to do that because you want to give a better experience to the customer.

The better experience cannot come through clogging the aisles and making very, very sharp stores. You can't give the customers a proper departmental store experiences, and we have realized that to our great this thing that's always a problem.

That mean in new stores which is bigger in size, we can see the inventory per square feet will be the same, but it will be in the bigger size, you are

Mr. Gupta, sorry for interrupting.

Your voice is not clear. Can you come in the range and talk, and can you speak a little louder?

Hello.

Yes, Karan, we can hear you.

Yeah.

Can we expect in the new stores, which is bigger in size, the inventory per square feet will be the same or it will increase, because you are saying that we are giving more experience kind of thing to the customer like playing kids area, playground area, and all these things? What kind of customer you are focusing on, because you have luxury brands also, we have value fashion also.

These all brands you are putting in a same store or it will be different kind of thing?

No, Karan, okay, let me address both the points. One is the inventory per square feet in a premium concept goes down, it doesn't go up, right?

That's the first point. The second point is 75% to 80% of the inventory, which is in SOR, I don't think having a larger store and having a larger inventory is detrimental for us in any ways, and especially because we lose the KPI of cover.

I think that is very clear. Yes, you are right.

As you put more and more experience zones, you need to have lesser number of brands, and that you in Juhu or Malad or the new stores which we are opening, that's the third point. I think the fourth thing is for us, the customer base which we have is actually the customer base which is the First Citizen.

It's a customer base which is for a more premium and premium-plus kind of a thing. To give you a sense, we don't keep value fashion products in our store.

InTune is a brand which has its own stores. We don't keep value fashion as a business, as a concept with us, Karan.

Thank you.

Hi. Are you sure that the InTune's inventory per square feet is ₹600, Karan?

Mr. Shah, sorry for interrupting.

Can you speak a little louder?

Hi, am I audible now?

Yes, better than before. Please go ahead.

Are you sure that the InTune's inventory per square feet is ₹600? No,

₹1,700. ₹1,700.

Not ₹600, that's what we said.

Oh, okay, sure. Thank you.

Hello, sir. Am I audible?

Your voice is muffled.

Am I audible? Is

this better? Is this better?

Yes, please go ahead.

Yes. Hi, good afternoon.

Just now, how has been quarter four so far? Overall FY26 then, what can one expect when it comes to revenue and EBITDA margins?

Q4, bit early to say, but the first 20 days, that is till yesterday, have been quite decent, particularly in the south markets where we have Sankranti, it performed quite well. The sales growth we expect in mid-single digit, Rahil, and the EBITDA margins would be close to in the low single digits.

That's what we expect by the end of this quarter four, for quarter four.

The sales growth in single digits is for quarter four as well, or overall for FY26?

Sorry, what is it, sales?

The sales growth you mentioned which you expect to be in single digits is for the last quarter or for overall for the year?

For the Q4 as well as for the entire year.

For the entire year, okay. EBITDA also in single digits expect for the last quarter?

That's right.

Okay. What sort of improvement you see in the next year with the kind of double-digit mid-single sorry, mid-teens growth expecting in the EBITDA, and what will drive it?

Number of things, right? I think Kavi spoke in detail: one, the premiumization what we are working on right now, plus the number of marketing campaigns what we had and the growth of what we are getting it from the marketing campaigns; third, beauty, the Global SS Beauty, I think again Kavi spoke, we are already touching a run rate of 500 and we have been growing more than 50%, those growth should improve; PB, the private brand, whatever that happened in Q3, we are working on to improve the overall efficiency in private brand; and InTune, again Devang spoke in detail and Kavi also spoke in details, what InTune we expect the losses to be at minimum it will come down by 50% and if not more than that.

There are a number of growth levers we are working on, and that's the reason we have said that the sales growth to be in mid-teens and the EBITDA margin should also improve next year.

Okay. Got it, sir.

Thank you for repeating that, and all the best to you.

Thank you.

Thank you.