Trent's Q2 Results: Growth Slows Despite Strong Margins - What Investors MUST Know!

Trent Limited announced its financial results for the July-September quarter of FY26, revealing a mixed performance. While the company managed to improve its reported EBITDA margin by 150 basis points year-on-year to 17%, its overall revenue growth moderated significantly. Consolidated revenue grew by 16% year-on-year to ₹4,800 crore. This deceleration was attributed to expansion in store area being offset by a decline in revenue generated per square foot. Same-store sales growth was consequently in the low single digits, indicating slower consumer spending or demand within existing store footprints. Despite a 27% year-on-year rise in reported EBITDA to ₹820 crore, gross profit saw a more modest 15% increase to ₹2,000 crore, accompanied by a contraction of 90 basis points in gross margin to 43.3%. This suggests higher cost of goods sold or increased promotional activities impacting profitability at the gross level.

Impact This news can impact Trent Limited's stock price, as investors may react to the slowing growth momentum despite margin improvements. It highlights potential challenges in driving sales from existing stores and managing cost of goods sold effectively. The market will likely scrutinize future guidance and strategies to re-accelerate comparable store sales. Rating: 6/10

Difficult Terms: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. Basis Points (bps): A unit equal to 1/100th of 1% (0.01%). 150 bps is 1.5%. Year-on-year (Y-o-Y): A comparison of financial data from one period to the same period in the previous year. Revenue per square foot: The amount of revenue generated for each square foot of retail space. Same-store growth: The increase in revenue from stores that have been open for at least a year, excluding revenue from new stores. Gross Profit: Revenue minus the Cost of Goods Sold. Gross Margin: Gross Profit expressed as a percentage of Revenue.