Metro Brands refutes suggestions of a slow economy hitting sale

 The footwear retailer maintained that its customers are ‘resilient’ against the slowdown seen in the broader economy, and expects to make up for lost growth in the third quarter.
Image of a 'Metro' footwear outlet for representational purposes.
Image of a 'Metro' footwear outlet for representational purposes.

Metro Brands, one of India’s leading footwear retailers, said that the company expects the slowdown that has afflicted its sales over the last year or so to be a temporary one, rather than related to the overall economy.

“We're seeing is probably a temporary headwind of timing more than it is an economic headwind that we're facing,” said the Metro Brands management during investors meet. 

This comes after the footwear retail chain reported a 13.18% decline in consolidated net profit to Rs 67.62 crore for the September quarter. 

The company had posted a net profit of Rs 77.89 crore during the year-ago period.

The total revenue of the company stood at Rs 555 crore, rising 16.66 per cent from Rs 476 crore registered in the year-ago quarter. 

The stagnation comes amid a similar slowdown in growth in some other, discretionary spending-oriented sectors, such as quick-service restaurants and garments.

However, Metro Brands was not ready to blame it all on the economy, and instead reiterated that last year had seen a lot of pent-up demand, which makes for unflattering comparisons this year. 

“Overall, we feel the consumers in our segment remain resilient to the business and are appreciative of the product offerings we have,” it added. 

The company also pointed out that some of the festivals that had fallen in the second quarter last year are coming in the third quarter this year, affecting second-quarter sales.

It remains confident that the upcoming festivals in the third quarter would bring some respite. 

“.. the shift in festivals, which really is a temporary headwind. It's a timing headwind, not an economic headwind,” said the management. 

The company reported Rs 532 crore revenue in the September quarter of FY24 while it registered Rs 463 crore on a year-on-year basis. This represented a decline from the Rs 556 crore it had reported in the preceding quarter.

Because of this, on a sequential basis, Metro Brands has seen its revenue somewhat flat since the first quarter of FY 2023. 

Market regions

The company said that it has a stronghold in the West and South regions, and has plans to push harder in eastern markets.
“There's still an opportunity in the East for us to go after,” it added. 

It pointed out that 13% of the stores in the East contribute to 14% of its overall sales. 

The management also noted that with Durga Puja– a key festival– pushed to the third quarter it expects a further uptick in its sales. 

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The New Indian Express