Indian fashion retailer Trent (TREN.NS) posted a 22% rise in quarterly profit on Thursday, as the expansion of its Westside and Zudio chains beyond metropolitan cities helped outweigh pressure from rising costs.
Large retail groups in India, including V-Mart Retail (VMAR.NS) and Arvind Fashions (ARVF.NS), are widening their footprint to tap rising incomes and demand for branded apparel in smaller cities.
Tata Group's Trent has been on an expansion spree in recent quarters, ending June with 1,312 stores, including about 300 Westside and over 980 Zudio across 330 cities. A year earlier, it had 1,043 stores in 242 cities.
The company's profit rose to 5.19 billion rupees ($54.5 million) for the quarter ended June 30, while revenue climbed 18% to 57.55 billion rupees.
"Trent delivered a solid operational performance... Steady store expansion and strong execution continued to support Trent's growth," said Mayank Jain, market analyst at Share.Market by PhonePe.
Like-for-like growth — a key sales metric in retail — for Trent's fashion portfolio was in the low single digit percentage range, holding the pace from the previous quarter.
Trent said it was "adopting a range of interventions" in sourcing and prices as costs of some inputs had risen in recent months, adding that prolonged disruptions in the Middle East could affect supply chains, commodity prices and inflation in the near term.
It did not provide further details.
Shares erased an early rally of as much as 3.7% after the results and were last trading less than 1% lower. The stock had slumped 12% a month earlier when Trent reported revenue growth below market expectations.
($1 = 95.2175 Indian rupees)
