Shoppers' Stop shares have been on a downward spiral on Wednesday, with the stock notably hitting a four-year low in the early. This comes after tepid third-quarter earnings, where profit fell 69% to Rs 16.1 crore, although the numbers were impacted by one-time exceptional loss of Rs 17.69 crore.
This was coupled with flat revenue growth, gaining only 2.6% year-on-year to Rs 1,419 crore. This compares to a topline of Rs 1,379 crore that was achieved during the same period last year. Amid flat growth, the management, in its official Q3 note, has suggested that sales were impacted by pollution in North India.
"Overall sales for the quarter were flat, impacted by festive calendar shifts, uneven discretionary demand and elevated pollution levels in Northern India," the management said, in an exchange filing on Wednesday.
Shoppers Stop is a department store chain and a part of the K Raheja Group. The company operates around 110 department stores, about 35% of which are located in North India. The company has a strong presence in New Delhi and Uttar Pradesh, two states which grappled with high pollution levels during the third quarter.
Given that much of Shoppers Stop's presence as a department store chain depends on customer entry, excessive winter pollution in Delhi and UP, which saw schools being shut, outdoor activity reduced, and people avoiding long commutes, can impact overall footfalls. On very bad AQI days, footfalls in malls can especially decrease in cities like Delhi.
However, it must be noted that Shoppers Stop did report a 5% like-for-like growth in customer entry, marking the second consecutive quarter of growth after the company had reported a 6% LFL growth in customer entry in the second quarter.
Also Read: Shoppers Stop Shares Hit Four-Year Low After Q3 Earnings
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