(Reuters) -Indian clothing retailer Trent reported a 11% rise in quarterly profit on Friday led by an influx of sales from new stores, and said it is trimming its stake in its Zara joint venture.
The Tata group entity, which owns the affordable young adult-focussed fashion chain Zudio, reported a net profit of 3.77 billion rupees ($42.89 million) for the three months ended September 30, up from 3.39 billion rupees a year ago.
Trent has been on a store-opening spree the last few quarters, with its store count climbing to 1,101 across 251 cities at the end of the reported quarter, compared to more than 800 outlets at the same time last year.
“We are adding presence in newer cities across tier 2/3 markets, as well as emerging catchments in the proximity of metro cities,” Trent said in an investor presentation.
The efforts helped revenue rise 16% to 48.18 billion rupees. However, the rise was Trent’s slowest in at least 16 quarters, tracking a slowdown that began more than a year ago.
“The consumer sentiment in the second quarter was relatively muted,” Trent said. Its profit after tax margin also shrunk to 10% from 11%.
Revenue growth slowdown — due to cash-strapped consumers cutting back — has prompted analyst concerns that its performance, which earned it a spot in the benchmark Nifty 50 last year, is cooling.
The Zudio owner also said it received a share buyback offer from Inditex Trent Retail India, a joint venture it formed in 2009-2010 with world’s biggest listed fast-fashion retailer Inditex to operate Zara stores in India.
Trent had cut its stake in Inditex Trent, whose revenue for 2024-2025 was 27.82 billion rupees, to 34.94% from 49% last year.
It did not disclose what its stake would be after the share sale.
($1 = 87.8950 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Urvi Dugar in Bengaluru; Editing by Janane Venkatraman)
