Trent’s slower Q4 growth reflects high-base hangover in retail and fast fashion cooldown

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Trent’s slower Q4 growth reflects high-base hangover in retail and fast fashion cooldown

Uniqlo and H&M saw their India sales grow by 60 percent and 40 percent, respectively, in FY23, but that pace halved in FY24, falling to 31 percent for Uniqlo and just 11 percent for H&M. These brands also saw their bottom lines battered by the shift in discretionary spending patterns.

 Aishwarya Nair
 
April 08, 2025 / 16:14 IST
Trent shares crash 18% on weak Q4 business update, biggest single-day fall since March 2020

Trent shares crash 18% on weak Q4 business update, biggest single-day fall since March 2020

Tata-owned Trent is beginning to feel the heat of a cooling fast fashion market from a high base seen post pandemic.

After clocking its slowest growth since FY21 in the January-March quarter, the retailer has joined a growing list of global and Indian apparel brands — including Uniqlo, H&M, and Lifestyle — that are now grappling with a sharp deceleration in revenue growth, a reversal from the boom seen in the immediate aftermath of the pandemic.

Trent’s stock tumbled 19 percent on April 7 after the company — which operates the Zudio and Westside chains — posted weaker-than-expected Q4 results. Revenue for the March quarter rose 28 percent year on year (YoY) at Rs 4,334 crore, significantly lower than its five-year CAGR of 36 percent. This was also the slowest YoY growth since March 2021, when the pandemic disrupted operations and sales rose just 7 percent. The Tata Group firm’s sales growth reached its highest in June 2022, increasing 405 percent YoY.

While Trent has consistently outpaced peers in revenue growth and store expansion, analysts now say that the broader macro pressures are catching up, particularly in metros and Tier-1 cities, where demand is stagnant amid inflationary pressures and slow income growth.

"In our view, after delivering strong double-digit like-for-like growth ... the high base effect is beginning to moderate Trent's growth momentum," Abhijeet Kundu, Analyst at Antique Stockbroking, wrote in a note.

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