Trent Shares Slip as Investors Seek Faster Revenue Growth

Shares of Indian fashion retailer Trent fell as much as 3.06% on Friday, despite the Tata Group company reporting a 22% rise in first-quarter profit. Investors remained focused on the pace of revenue growth, with Trent’s revenue increasing 18% to ₹57.55 billion, below the 20%-21% medium-term growth expectations of some brokerages.

Like-for-like sales growth, a key measure of retail performance, remained in the low single digits for the second consecutive quarter. Analysts said Trent’s growth continues to be driven largely by new store openings across its Westside and Zudio chains, while newer stores take time to reach full productivity. Expansion into smaller cities remains a key long-term growth driver, but is currently putting pressure on revenue productivity.

Brokerages said stronger revenue growth and improved store productivity would be important catalysts for Trent’s shares. Citi noted that first-quarter revenue was around 4% below its estimates despite stronger margins, while Bernstein said profitability remained solid but revenue productivity per square foot declined as the company expanded rapidly into newer markets.

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