Avenue Supermarts, operator of DMart retail stores, reported a 9.4% year-on-year increase in standalone net profit for the quarter ended December at Rs 641 crore, much less than the Bloomberg poll estimates of Rs 694 crore.
Revenue from operations rose 24.7% on year to Rs 11,305 crore, however, the profitability declined 100 basis points to 8.6% on unfavourable product mix and higher expenses during the quarter.
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During the quarter, FMCG and staples segment outperformed the general merchandise and apparel segments, said Neville Noronha, CEO & Managing Director, Avenue Supermarts. Gross margin percentage decline over the corresponding quarter of last year is a reflection of this mix change. Discretionary non-FMCG sales did not do as well as expected in this quarter, he said.
Even in September quarter, Avenue Supermarts had said that discretionary items in the non-FMCG segment, while recovering, had still not come back to pre-pandemic levels. The inflationary stress was seen to be more acute at lower price points in discretionary non-FMCG categories.
The profitability was also impacted because of 26% on year rise in total expenses during the quarter which rose to Rs 10,484 crore led by employee expense and other expenses.
During the quarter, FMCG and staples segment outperformed the general merchandise and apparel segments, said Neville Noronha, CEO & Managing Director, Avenue Supermarts.
“Gross margin percentage decline over the corresponding quarter of last year is a reflection of this mix change.
“Discretionary non-FMCG sales did not do as well as expected in this quarter,” he said.
Even in September quarter, Avenue Supermarts had said that discretionary items in the non-FMCG segment, while recovering, had still not come back to pre-pandemic levels. The inflationary stress was seen to be more acute at lower price points in discretionary non-FMCG categories.
The profitability was also impacted because of 26% on year rise in total expenses during the quarter which rose to Rs 10,484 crore, led by employee expense and other expenses.
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During October-December, the company expanded its e-commerce operations in 4 new cities, thereby increasing the number of stores to 306.
It’s operations now span across 22 cities in India.
The company is in process of commencing a pharmacy shop-in-shop through one of our subsidiary — Reflect Healthcare and Retail Private Ltd at one of our stores.
This is a pilot to complement brick and mortar business using of Dmart.
On Friday, shares of Avenue Supermarts closed 1.28% down at Rs 3,862.20 on BSE.