Q4FY19 was volatile for retailers, with January and March strong, and February soft. Despite some shift in the end of season sale to Q3FY19 and higher discounting from online retailers in January, SSSG should remain decent. Sharp store expansion by retailers should keep overall growth strong but margins will likely come under pressure due to deteriorating store mix and gestation costs. We expect FRETAIL to post the strongest numbers in Q4 within our coverage.
ABFRL: We expect lifestyle brands to register SSSG of 6% y-o-y (on a base of 7.7% y-o-y) while Pantaloons is expected to clock SSSG of 8% y-o-y (on a base of 6% y-o-y dip). Overall top line growth is expected to be 13.5% y-o-y, helped by increased store expansion (both in Pantaloons and Madura) and faster growth in the inner wear business. Given higher advertisement spend across brands and higher base of EBITDA, we expect flattish margins.
Avenue Supermarts: Higher addition of stores in Q4FY19 (store addition is backended as the company added a mere nine stores in 9MFY19 while it has added about 11 during Q4FY19) and focus on giving more value to customers should keep the revenue trajectory strong. Total store count has increased to 175 in FY19 against 155 in FY18. We expect 34% y-o-y revenue growth for D-Mart while EBITDA and PAT growth will be lower at 13.8% y-o-y and 7.8% y-o-y, respectively.
FLFL: We expect overall top line growth of 21% y-o-y while EBITDA and PAT growth is expected to be 6.8% y-o-y and 8.7% y-o-y, respectively. We expect the company to report SSSG of 9% y-o-y in Q4FY19 on a base of 4.8% y-o-y. The growth is led by 15% y-o-y SSSG in Brand Factory, while Central is expected to see SSSG of 6% y-o-y in Q4FY19. Store expansion led by Brand Factory (store count stood at 94 stores against 89 in Q3FY19) should keep the overall growth strong but will impact margins.
Future Retail: We expect revenue, EBITDA and PAT growth of 13% y-o-y, 28.3% y-o-y and 29% y-o-y, respectively. We expect 9% SSSG for Big Bazaar on a base of 11% y-o-y while overall SSSG for Future Retail is expected to be 6% y-o-y (on a base of 6% y-o-y). EBITDA margin will benefit from the improvement in margins of Hypercity.
Shoppers Stop: We expect Shoppers Stop to clock SSSG of 7% y-o-y on a base of 4.1% y-o-y dip during Q4FY19. We expect revenue and EBITDA growth of 5% y-o-y (IND AS impact) and 16% y-o-y, respectively, while PAT will be down 2% y-o-y due to a higher tax rate on a y-o-y basis. Strong focus on make-up should aid margins for the company. Shoppers Stop closed the year with 84 stores with a net addition of only one store during the year.