Retail chains are expected to report lower profit growth in the June quarter compared to a year ago, for the third time in a row, on muted volumes and decline in same-store sales as consumers spend less despite an extended discount season.

?The June quarter has not seen any major pick-up in sales as consumers postpone their purchases towards the ensuing discount season in the second quarter of FY 2013,? writes Nikhil Vora, managing director of IDFC Securities, in his Q1 earnings preview.

According to analysts, retail chains’ net profit is likely to grow 7-8% year-on-year. A revenue growth of 16-18% is projected, driven by higher sales by specialty retail chains Titan Industries and Jubliant FoodWorks, owners of popular food chain Domino’s Pizza. Sales of food and beverages and apparel retail chains like Pantaloon Retail India (PRIL) and Shoppers Stop will be driven by fresh stores and a hike in apparel prices, but heavy debt and losses will dent their profits.

PRIL, which sold its apparel retail chain to Aditya Birla Nuvo to cut debt, is expected to grow its sales by 8% y-o-y as it increased space by 0.3-0.4 million sq ft, Gautam Duggad, an analyst at brokerage Prabhudas Liladher wrote in a report. ?Same-store growth should come in at 3-4% for the value and lifestyle formats, while the home division should report a de-growth.?

PRIL had managed to cut its debt by R2,200 crore, but worries remain. ?Though margins are likely to expand by 10 basis points, a 40% increase in interest costs will result in PAT declining 57% for the quarter,? according to IDFC. ?The benefit of fundraising will be visible in the form of lower interest costs only in the quarters to come.?

Shoppers Stop’s margins are likely to remain flat at 6.5%, while revenue may grow by 20-25%, driven by store expansion and price hike in apparels.

According to Prabhudas Liladher, same-store sales could come in at 4-5% higher led by price hikes. However, higher overheads on new store openings and an extended discount period will impact profit margins, brokerage Motilal Oswal said in a report.

Tata Group’s Titan Industries is likely to log in a PAT growth of 22-25% for the quarter as its margins expand by 50 basis points ?Titan has a robust balance sheet and strong market dominance in its core categories,? writes Duggad.?The company’s jewellery division Tanishq is expected to grow at 24%, though same-store sales continue to be sluggish. Jewellery demand recovered sequentially, led by the wedding month in May, but high gold prices continued to dampen consumer sentiments, leading to a 10% decline in volume growth.??Jewellery sales growth will be realisation-driven with volumes expected to decline in double digits owing to a high base and a steep increase in god prices,? estimates IDFC. The watch segment will grow at 22%, but a higher tax rate will limit PAT growth to 20%. Revenue growth for Jubilant Foodworks is seen at an impressive 40% and same-store sales growth at a healthy 27%, riding on high demand ?in the quick service restaurant industry and opening 24 stores in the quarter. Its operating margins are likely to grow by 80 basis points to 19%.

?Jubilant Foodworks has strong cash flows; we would watch out for same-store sales growth trends and revenue from the newly opened Dunkin Donuts stores,? states Motilal Oswal’s report.