(Reuters) – Indian footwear retailer Metro Brands missed second-quarter profit estimates on Wednesday, as higher expenses weighed on muted sales growth.
The footwear retailer reported a consolidated net profit after tax of 695.5 million rupees ($8.3 million) in the quarter ended Sept. 30, up 4% from a year ago.
Analysts, on average, were expecting 767.4 million rupees, according to data compiled by LSEG.
Revenue from operations rose 5% to 5.85 billion rupees, while expenses rose 7.9% to 5.15 billion rupees.
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KEY CONTEXT
Indian apparel and footwear retailers have been hurt by fewer wedding days and a weak demand environment, which has constricted overall market performance, said analysts at Elara Capital.
This was reflected in the earnings of Shoppers Stop, which reported a loss for the second straight quarter on Tuesday. Its CEO attributed it to fewer wedding dates, extended rains and overall weak discretionary spending.
However, Metro Brands said it expects demand recovery in the second half of the financial year, driven by festive and wedding season spending.
Metro’s peers Relaxo Footwears and Bata are yet to report second-quarter results.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’ sentiment
12 months) months
RIC PE EV/EBI Revenue Profit Mean # of Stock to Div yield
TDA growth (%) growth (%) rating* analyst price (%)
s target**
Metro Brands 68.76 35.99 15.55 13.60 Hold 18 0.91 0.38
Bata India 48.71 21.15 9.24 23.38 Hold 10 0.97 1.36
Relaxo Footwears 65.85 34.89 11.55 23.43 Hold 12 0.95 0.39
Campus Activewear 57.63 29.92 13.89 33.88 Buy 8 0.98 –
* The mean of analyst ratings standardized to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
JULY-SEPTEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 84.0570 Indian rupees
(Reporting by Ashna Teresa Britto in Bengaluru; Editing by Varun H K)
