Trent Q4 Preview: Margin Expansion Seen As Store Expansion Drives Sales

Trent is expected to report strong March-quarter growth, supported by continued store additions across Westside and Zudio, with margins also seen improving on scale benefits and a better format mix. The operator of Westside and Zudio stories are set to requit their fourth quarter results on Wednesday.

Bloomberg estimates indicate revenue may rise 18% year-on-year, while Ebitda is seen up 22% and profit up 7%. Ebitda margin is projected to improve to 16.50% from 15.97% a year earlier. The quarter is expected to reflect another period of rapid network expansion, with brokerages pointing to fresh store additions across both key formats.

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The key question this quarter is whether Trent can sustain high growth as its store base expands rapidly. Investors will watch same-store productivity, any signs of cannibalisation in Zudio, margin gains from a stronger Westside mix, and the pace of future store additions as the company scales further.

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Trent Q4 Preview Key Highlights (YoY, Bloomberg Estimates)

• Revenue seen 18% higher at Rs 4,864 crore versus Rs 4,106 crore
• Ebitda seen 22% higher at Rs 803 crore versus Rs 656 crore
• Ebitda margin seen at 16.50% versus 15.97%
• Profit seen 7% higher at Rs 376 crore versus Rs 350 crore

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Here's what analysts are expecting from Trent Q4 results:

Systematix

• Expects revenue growth of about 20% year-on-year.
• Added 22 Westside stores and 109 Zudio stores in Q4.

HSBC

• Builds in additional quarter-on-quarter store additions for both Westside and Zudio.
• Expects Zudio revenue per square foot to decline year-on-year as new stores cannibalise existing locations, though overall growth remains stable.
• Blended revenue per square foot also expected to decline, though less sharply than in the previous quarter.
• Revenue growth seen improving to about 17%, aided by a favourable base.
• Gross margins expected to improve year-on-year due to a better mix toward Westside.
• EBIT expected to rise about 20% year-on-year.

Citi

• Models net addition of 58 stores in the quarter, including Westside and Zudio.
• Expects revenue growth of about 18% year-on-year.

Morgan Stanley

• Fashion business revenue expected to grow 17% year-on-year, slightly faster than the prior quarter.
• Expects strong net store additions across Westside and Zudio.
• Margins expected to improve year-on-year.

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