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Trent Zudio Store Surge Outpaces Zara
22 Aug
Summary
- Zudio's store count nears 1,000, projected to reach 2,000 by 2030.
- Trent's EBITDA grew 33% YoY, outpacing 18% revenue growth.
- ABFRL's Pantaloons segment saw store count decline and negative PAT.
Trent Limited's Zudio chain is experiencing remarkable growth, with its store count reaching 982 as of the recent quarterly report. This expansion is projected to continue, potentially reaching 2,000 stores by 2030, a pace that could exceed global fast-fashion leader Zara's current network.
In the recent quarter, Trent's consolidated revenue saw an 18% year-over-year increase, accompanied by a strong 33% rise in operating EBITDA and a 29% increase in operating EBIT. This margin expansion highlights Trent's pricing leverage, with PAT margins improving significantly to 9.24% from 6.2% in Q1 FY23 over the past four years.
In contrast, Aditya Birla Fashion and Retail Limited (ABFRL) faces challenges. Its Pantaloons segment reported a decline in store count to 399 from 405 and posted a net loss of Rs -249 crore in Q1 FY27. ABFRL's EBITDA also declined, with its overall PAT margin standing at a negative 12.2%.
Despite a recent stock price correction, Trent's valuation multiples are becoming more reasonable, with a forward PE below 70. The company's strong store growth, revenue performance, and margin expansion suggest continued PAT growth potential, making it an interesting option in the retail sector.
