India's Metro Brands misses Q2 profit estimates on high expenses, weak demand

Metro Brands

23/10/2024 13:28

Oct 23 (Reuters) - Indian footwear retailer Metro Brands  METB.NS  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.
    For further highlights, click  urn:newsml:reuters.com:*:nFWN3LZ0J1
    
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  SHOP.NS , 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  RLXO.NS  and Bata  BATA.NS  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       METB.NS    68.76    35.99      15.55       13.60      Hold      18         0.91        0.38
     Bata India        BATA.NS    48.71    21.15      9.24        23.38      Hold      10         0.97        1.36
  Relaxo Footwears     RLXO.NS    65.85    34.89      11.55       23.43      Hold      12         0.95        0.39
  Campus Activewear    CAMU.NS    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

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
METB Q2    https://tmsnrt.rs/3BSBwVd
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Ashna Teresa Britto in Bengaluru; Editing by Varun H K)
 ((AshnaTeresa.Britto@thomsonreuters.com;))