Shares of Avenue Supermarts, which owns and operates D-Mart stores, fell 5% to Rs 3,501 on the BSE in intraday trade on Monday after the company reported a lacklustre operating performance for the January-March quarter, with profitability below market expectations (Q4FY23).

The company’s reported EBITDA margin contracted 110 basis points to 7.3% in Q4FY23, compared to 8.4% in Q4FY22. Absolute EBITDA rose only 4% year-on-year to Rs 771 crore.

The company said consumer spending on general merchandise and apparel continued declining, impacting the margin mix downward.

Avenue Supermarts reported a 20.6% year-on-year rise in consolidated revenue to Rs 10,594 crore. Consolidated net profit rose 7.81% to Rs 460.10 crore from Rs 426.75 crore a year earlier.

D-Mart is a national supermarket chain that provides customers with a one-stop range of home and personal products. The company offers a wide range of products focusing on food, non-food (FMCG) and general merchandise and apparel product categories.

Over the past three years, the company has expanded square footage at an impressive three-year CAGR (approx. 22%), with new stores averaging larger (approx. 55,000+ vs. average 35,000 sq ft).