> ## Content Index > Fetch the complete content index at: https://www.moatmarginresearch.com/llms.txt > Use this file to discover other available public pages before exploring further. # Trent's September Quarter: Sales Grew With the Store Count, and Store Costs Grew With Them - URL: https://www.moatmarginresearch.com/trent-q2-store-growth-vs-lfl-margin/ - Published: 2026-10-30T02:53:23.000Z - Updated: 2026-10-30T02:53:23.000Z - Description: Trent's Q2 FY27 revenue rose 23% as Westside and Zudio stores grew 23%; like-for-like growth was mid-single digit. What that says about margin. - Author: A K Karthikeyan - Tags: Moat Insights **Trent's standalone revenue grew 23% in July–September 2026, and the combined Westside and Zudio store count grew 23% (our arithmetic). The company's own like-for-like growth for its fashion stores was "in the mid-single digits". Operating EBIT margin rose to 11.6% from 10.5%, but in the statements it does not come from the employee, occupancy and other store costs that scale is meant to spread; on our own gross-profit proxy (our arithmetic) the gain sits in the cost of stock, while the company calls its gross margin profile "stable". The filings show a growth engine that works by adding stores, and a margin that held while it did. They do not show the store-level economics that would tell us the new stores pay for themselves.** MoatSCORE: 4.97 (read live on the Moat Screener on 30 Oct 2026; first-pass, provisional). Our first-pass note on the company is on its [moat page](https://www.moatmarginresearch.com/trent-moat/). ## The idea in one sentence For a store-led retailer, "revenue up 23%" and "each store sells more" are different claims, and the moat question is which one the filings can prove. ## The fact that breaks the assumption The headline is real: standalone revenue from operations of ₹5,788 crore, up 22.5% (our arithmetic: 5,787.64 against 4,724.06), operating EBITDA ₹791 crore up 37%, operating EBIT ₹669 crore up 35% (\[PR\]; \[IP\], p.6). The deck's own definition of like-for-like growth is "Basis revenues of qualifying same stores operational for over 18 months" (\[IP\], p.12). And the deck's number for it is: "Like-for-like growth for our fashion portfolio in Q2FY27 was in the mid-single digits." (\[IP\], p.10). Revenue up about 22.5% in total, same-store growth in the mid-single digits. Our reading: most of the growth did not come from stores that were already open. ## One concrete thing, followed: the store count The deck gives store counts for five September quarters (\[IP\], pp.14 and 19). Westside: 261 a year ago, 311 now. Zudio: 806 a year ago, 999 now, with the 1,000th store opened in the quarter (\[PR\]). Combined, 1,067 to 1,310, up 22.8% (our arithmetic). The company says it opened 10 Westside and 19 Zudio stores in the quarter and "consolidated 2 Zudio stores" (\[PR\]). Divide standalone revenue by those period-end store counts and the quarterly figure is ₹4.42 crore per store this year against ₹4.43 crore last year, down 0.2% (our arithmetic). It was ₹5.03 crore in the September quarter two years earlier and ₹3.85 crore four years earlier (our arithmetic). This is crude: stores opened in the quarter count in full but sold for part of it, standalone revenue includes whatever else the company sells, and the Zudio count includes stores operated inside Star. It is a direction, and it agrees with the company's like-for-like words. If like-for-like was around 5% on the stores that qualify, the other roughly 17 points of the 22.5% came from stores opened or matured since (our arithmetic; the qualifying base is not disclosed, so an order of magnitude). The deck gives current area only (Westside 7.46 million sq ft over 311 stores, Zudio 11.02 million over 999: about 24,000 and 11,000 sq ft a store, our arithmetic), so revenue per square foot cannot be computed from the filings. ## The mechanism: footprint adds revenue, store costs keep pace **What the company says about the new stores.** On the quarter's Zudio openings the deck says: "Approximately 85% of Zudio stores opened during the quarter were in peripheral growth markets or in Tier II cities & beyond." Of such markets it says: "Newer and secondary markets offer attractive growth potential despite relatively longer maturity profile and hence, these stores are not entirely comparable with those of the established portfolio." It also says: "Greater cluster density, coupled with an improving customer proposition, is delivering encouraging revenue throughput and profitability outcomes." (all \[IP\], p.9). Our reading: the company itself says new stores take time to mature, so the quarter's totals include stores that have not. **What the statements show.** Rebuilt from the standalone results as a percentage of revenue from operations (our arithmetic): | % of revenue (standalone) | Q2 FY27 | Q2 FY26 | Change | | ----------------------------------------------------------------------- | ------- | ------- | -------- | | Gross profit proxy (revenue less stock purchased less inventory change) | 44.5 | 43.3 | +121 bps | | Employee benefits | 6.8 | 6.1 | +67 bps | | Occupancy cost including rent | 8.7 | 8.5 | +20 bps | | Other expenses | 10.8 | 11.5 | −65 bps | | Depreciation and amortisation | 6.9 | 6.7 | +25 bps | | Profit before tax, exceptional items and other income | 10.6 | 9.7 | +89 bps | Employee, occupancy and other expenses together were 26.3% of revenue against 26.1%, up 23.6% in rupees against revenue up 22.5% (our arithmetic). Store-level costs rose with revenue, not behind it. Employee cost rose 36.0% (our arithmetic), part of which is share-based pay: the cash-flow statement shows an employee stock option expense of ₹14.17 crore for the half-year against nil a year earlier. Other expenses were the one store-cost line that added margin, rising only 15.6% (our arithmetic). The proxy's gain of about 120 bps (our arithmetic, not a company figure) is in the stock line: purchases of stock-in-trade rose 24.9% while the cost of goods implied by purchases and inventory change rose 19.9% (our arithmetic), because inventory rose by ₹512.63 crore in the quarter against ₹302.61 crore a year ago. That is a wrinkle, not proof of better buying: a larger inventory build lowers the proxy's cost of goods. Standalone inventories were ₹2,823.07 crore on 30 September against ₹2,268.61 crore on 31 March, up 24.4% (our arithmetic), and the half-year cash-flow statement shows ₹554.46 crore absorbed by inventory against ₹195.79 crore. The company's words differ from the proxy: "The gross margin profile of Westside and Zudio remains stable" (\[PR\]). Provisioning, timing or other operating revenue could explain the gap; the filings give no gross margin, so we cannot say. On the half-year the proxy was 45.6% against 44.2% (our arithmetic), the same direction. **What the company says about the seasonal read.** "We believe given our approach with respect to merchandise sourcing, price architecture, distribution and disciplines around inventory provisioning, the full year results are more representative of the performance of the business" (\[PR\]). The deck says the quarter was seen "in the context of the shift of the festive window this year" (\[IP\], p.9). Sequentially the proxy was 46.6% in Q1 FY27 and 44.5% in Q2; a year ago it was 45.1% and 43.3% (our arithmetic). The second quarter is the weaker one in both years. **Our reading.** Efficient scale, as we use it, means a larger network spreads fixed costs, and an annual-report line quoted on \[MP\] (p.108 of the report; we did not reopen it) says the same: a growing footprint is "likely to scale faster, resulting in cost leverage and economies of scale which will drive profitability". In this quarter's cost lines it does not yet show: employee, occupancy and other costs held their share of revenue (26.3% against 26.1%). What the company points to instead, and what our first-pass page \[MP\] also credits, is sourcing: "Our sourcing actions and broader supplier engagements continue to help us navigate these inflationary headwinds" (\[IP\], p.9), with "a broadly stable price architecture across categories" (\[IP\], p.11). If that reading holds, the moat is in the repeatable store and the buying, which the quarter supports, rather than in operating leverage, which it does not yet show. ## Star: the same engine, a different ledger The press release says "Star revenues grew by over 20% during the quarter"; the deck charts ₹1,006 crore against ₹826 crore a year ago, up 21.8% (our arithmetic), with own brands at 74% of sales against 73%, across 87 stores in 13 cities after one addition in the quarter (\[IP\], pp.26–27). The deck's Star figure "Includes Zudio SIS stores" (\[IP\], p.26), and the company says "our consolidated revenues do not include revenues of the Trent Hypermarket business" (\[PR\]); consolidated revenue exceeds standalone by only ₹85.5 crore (our arithmetic). Profit enters only as a share of results: consolidated share of loss from associates and joint ventures was ₹21.06 crore for the quarter and ₹30.80 crore for the half-year, against a share of loss of ₹1.10 crore in the September 2025 quarter (our arithmetic: consolidated profit before tax of ₹476.98 crore less ₹478.08 crore before that line) and a ₹8.11 crore share of profit in the half-year a year earlier (\[RS\]). The auditors' paragraph 6 names "the Group's share of loss aftertax of Rs. 21.88 crores and Rs. 38.85 crores for the quarter and six months" in a joint venture reviewed by other auditors, without naming it; Trent has two joint ventures on the list, so we do not say it is Star. Star's growth is visible in revenue and not, in these filings, in profit. ## What the filings say about quality and standing Deloitte Haskins & Sells LLP's review reports are unmodified: the standalone report gives the standard negative assurance ("nothing has come to our attention"), and note 7 says the auditors "have issued an unmodified opinion". The consolidated report adds two reliance paragraphs, on other auditors for two subsidiaries and a joint venture, and on management-certified results for three subsidiaries, two associates and a joint venture that management says are not material to the Group, and in each says "Our conclusion on the Statement is not modified". The standalone debt-equity ratio is reported at 0.26 (\[RS\]). Board change: Noel Tata retires as Chairman and Director at the close of business on 11 November under the Tata Group Governance Guidelines, becomes Chairman Emeritus the next day, and Bahram Vakil succeeds him (\[BD\]). The filing gives the guidelines' retirement requirements as the reason and states no other. ## Where this breaks - **The mature-store signal is one phrase.** "Mid-single digits" is a band, not a number, the base excludes stores under 18 months, and we have not read earlier quarters' like-for-like. A mid-single-digit read could be good for a value-fashion chain in a quarter with a shifted festive window, and the company says that window mattered. - **Per-store revenue is crude.** Period-end counts understate average stores in a quarter of heavy opening, and smaller-town Zudio stores are smaller-ticket by design, so flat revenue per store could be mix. - **The margin read depends on a proxy.** The company says the gross margin profile is stable; our proxy says it rose about 120 bps. Provisioning, timing of inventory and other operating revenue could account for the gap, and the filings do not say. If the proxy is wrong, the operating EBIT margin gain came from somewhere we cannot see. - **Base effect on profit.** Standalone profit after tax rose only 9% to ₹489.65 crore because the base quarter held ₹96 crore of profit on sale of assets, which the company calls non-operating (\[PR\]). Profit before tax and before other income rose 33.7% (our arithmetic). - **The new stores are unproven in these filings.** Nothing here gives store-level EBITDA, payback or the maturity curve, which is the one disclosure that would settle whether new Zudio stores in smaller towns reach the older stores' economics. The company's phrase that these stores "are not entirely comparable" is a reason to ask for it. - **No peer data.** The deck says "the competitive intensity has been high over the past few years, with no material recent shift"; with no rival margins, the filings cannot show whether Trent held margin better than peers. - **Strongest case against our thesis.** If Trent's moat is the repeatable store, then a network growing 23% with a rising margin is the moat working, and mid-single-digit like-for-like is the right number for a business that opens stores into new catchments faster than old ones mature. On that view our reading understates it. We think the quarter proves the engine and leaves the maturity of the new stores open. ## Why it costs the reader something A reader who takes "23% revenue growth" as proof that each Trent store is getting more productive has counted new stores as better stores. A reader who takes mid-single-digit like-for-like as a fading brand has skipped that the company is opening into markets it calls less mature. The supportable statement is narrower: growth tracked the store count, same-store growth was a fraction of it, the margin rose without a visible cost-line saving, and no filing says what a new store earns, the number a holder of a store-led retailer most needs. ## What to watch 1. The like-for-like wording in the December quarter against "mid-single digits", and any call transcript (none was filed with the 29 October documents we read). 2. The gross-profit proxy (44.5% against 43.3%, our arithmetic) and whether the company puts a number to "stable". 3. Employee, occupancy and other costs as a share of revenue (26.3% against 26.1%, our arithmetic): the test of whether scale starts to show in cost lines. 4. Revenue per store on the same crude count (₹4.42 crore a quarter), and Star's share of loss in the joint-venture line. ## The concrete thing, again Revenue ₹5,788 crore, up 22.5%; stores 1,310, up 22.8%; revenue per store ₹4.42 crore, flat; like-for-like "in the mid-single digits"; operating EBIT margin 11.6% against 10.5%. The company is growing at the speed of its store openings, and the margin held. Whether the stores it opened this quarter will one day sell what the older ones do is the part the filings leave to the next several quarters. ## Sources - **\[RS\]** [Trent Limited, results for the quarter and half-year ended 30 Sep 2026, with notes and limited review reports](https://nsearchives.nseindia.com/corporate/TRENT%5F29102026160446%5FDraftOutcomeofBM.pdf) (NSE) - **\[IP\]** [Trent Limited, investor presentation, Q2 FY27](https://nsearchives.nseindia.com/corporate/TRENT%5F29102026161637%5FInvestorPresentationQ2FY27.pdf) (NSE) - **\[PR\]** [Trent Limited, press release on Q2 and H1 FY27 results](https://nsearchives.nseindia.com/corporate/TRENT%5F29102026162053%5FPressReleaseOct2026.pdf) (NSE) - **\[BD\]** [Trent Limited, change in directors](https://nsearchives.nseindia.com/corporate/TRENT%5F29102026163044%5FAppointmentofDirector.pdf) (NSE) - **\[MP\]** [Trent Moat Analysis: Score & Risks](https://www.moatmarginresearch.com/trent-moat/), with [How MoatSCORE works](https://www.moatmarginresearch.com/moatscore/) --- > Educational research, not investment advice. Every figure above is drawn from Trent Limited's own filings, read from the primary documents on 29 and 30 October 2026; derived figures are our arithmetic, labelled as such. MoatSCORE: 4.97 (read live on the Moat Screener on 30 Oct 2026; first-pass, provisional). No buy/sell recommendations, no price targets, no share prices. Moat & Margin is not a SEBI-registered Research Analyst or Investment Adviser.