Summary
Spencer’s Retail Limited - Q3 FY26 Earnings Call Summary Monday, February 09, 2026 4:30 P.M. IST
Event Participants
Executives 4 Anand Kumar, Anuj Singh, Manjir Basu, Pankaj Kedia
Analysts 2 Anita Bajaj, Sidharth Negandhi
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹581 crores | -2.7% YoY, +13% QoQ; YoY impact due to split festive season and membership cashback accounting. |
| Revenue (Spencer’s) | ₹500 crores | -2.0% YoY, +12% QoQ; Stabilizing offline performance coupled with 27% growth in online sales. |
| Revenue (Nature’s Basket) | ₹81 crores | -6.9% YoY, +19% QoQ; Lower YoY due to hiving off of the gifting studio and split festive season. |
| Gross Margin (Consol) | 21.2% | +30 bps YoY; Maintained despite a 300 bps margin blip in Nature’s Basket. |
| EBITDA (Post-IndAS) | ₹8 crores | -46.7% YoY; Impacted by a one-time ₹53 crore reduction in “Other Income” and new Labour Code provisions. |
| Average Order Value (Jiffy) | ₹775 | Sustained high AOV; amongst the highest in the quick commerce segment. |
| Online Sales (Jiffy) | ₹54 crores | +27% YoY; Achieved positive unit economics (₹6 contribution per order) for the first time. |
| Membership Count | 70,000+ | New initiative; members spend 3x more and shop 2x more frequently than non-members. |
Geographic & Segment Commentary
- Spencer’s (Core): Delivered a solid quarter with offline stabilization and significant online growth. Management noted that adjusting for the split festive season and one-off accounting for membership cashbacks, the segment is entering a growth trajectory. Strategic focus remains on staples and fresh categories, which are driving the monthly planned shopping basket.
- Nature’s Basket: Experienced a margin contraction to ~27% due to supplier negotiation timing but expects a return to 29-30% levels. Performance was stronger in Mumbai and the West compared to the South (Bangalore), where internal operational challenges are being addressed. The segment recently completed a tech migration of its app to the Jiffy backbone to improve the omnichannel experience.
- Geographies: Eastern UP (Lucknow, Varanasi, Gorakhpur) outperformed West Bengal in terms of offline resilience. In larger metros like Kolkata, growth is increasingly driven by the online channel (Jiffy), whereas upcountry locations remain dominated by robust offline footfalls.
Company-Specific & Strategic Commentary
- Membership Program: Launched in July 2025, the program reached 70,000 paid members who account for 25% of total sales. Members exhibit an 80%+ N+1 retention rate and shop more than 4 times per month, serving as a critical tool to arrest offline footfall erosion.
- Online Unit Economics: Achieved positive unit economics on Jiffy with an RGM per order of ₹100 against a fulfillment cost of ₹94. Management is prioritizing organic customer recruitment over expensive inorganic acquisition to limit cash burn.
- Inventory Optimization: Focused on “quick selling items” and high availability in staples/fresh, which helped stem offline degrowth. Management plans to replicate Spencer’s inventory discipline in Nature’s Basket to liquidate old aging stock and improve margins.
- Omnichannel Strategy: Aiming for out-of-store business (Online + Phone delivery) to reach 20% of the total mix, currently standing at 16-17%. The company uses existing stores as fulfillment hubs (grey stores) rather than investing in a dark store model.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth (Spencer’s) | Mid-single-digit (Q4 FY26) | Driven by momentum observed in the last four months and stabilized offline operations. |
| Membership Base | 100,000 members (By end FY26) | Plans to double this base in FY27 to deepen customer “skin in the game.” |
| EBITDA Breakeven | Within 2 quarters (FY27) | Refers to true operational EBITDA breakeven for the Spencer’s offline business. |
| Online Sales | ₹200 crore run rate (Exit FY26) | Growth to be managed “responsibly” without incurring heavy customer acquisition losses. |
Risks & Constraints
| Risk | Context |
|---|---|
| Competitive Intensity | Large quick commerce players with deep pockets are expanding into Tier 1/2 cities. Spencer’s mitigates this by focusing on high-touch “fresh” categories and a value-based membership model rather than 10-minute delivery. |
| Margin Pressure | Nature’s Basket saw a 300 bps YoY dip in Q3 due to supplier terms. Management must successfully renegotiate these terms to return to the historical 30% margin threshold. |
| Regulatory/Labour Costs | One-time provisions for the new Labour Code impacted Q3 opex. While management expects this to be “baked in,” any further regulatory shifts could pressure the path to EBITDA breakeven. |
Q&A Highlights
Channel Dynamics
- Question: Which parts of the business are showing the strongest momentum? (Anita Bajaj)
- Answer: Online is the primary growth driver; staples and fresh categories are firing well. Geographically, Eastern UP is performing better in offline growth than West Bengal (Anuj Singh).
Quick Commerce Competition
- Question: How are you protecting market share against 10-minute delivery players? (Sunny Bhadra)
- Answer: Spencer’s is not competing on the dark store model or burning cash for 10-minute delivery. The focus is on wider assortment, fresh quality, and “responsibly delivered” 30-minute windows using existing store assets (Anuj Singh).
Membership Behavior
- Question: Are members shopping across both online and offline? (Sidharth Negandhi)
- Answer: Most members are recruited and shop primarily offline. There is currently no significant overlap between members’ offline and online purchase behavior (Anuj Singh).
Margin vs. Throughput
- Question: Are you aiming for higher percentage margins? (Sunny Bhadra)
- Answer: Current margins of 20% are healthy. The goal is to drive Rupee Gross Margin (RGM) through higher sales per square foot (SPSF), potentially trading off minor percentage points for significant volume growth (Anuj Singh).
Key Takeaway
Spencer’s Retail Limited delivered a resilient Q3 FY26, characterized by high consolidated gross margins of 21.2% and a significant 27% YoY growth in its online Jiffy platform, which achieved positive unit economics for the first time. While consolidated revenue was marginally down YoY at ₹581 crores due to festive timing and accounting changes, the company successfully stabilized its offline footprint following previous year’s store optimizations. Strategic focus has shifted toward a high-engagement membership program, which now contributes 25% of sales, and leveraging “fresh” and “staples” to drive store productivity. Looking ahead, management guided for mid-single-digit top-line growth in Spencer’s for Q4 and aims for operational EBITDA breakeven within two quarters. The primary watch point remains the competitive pressure from quick commerce players, which Spencer’s intends to counter through its omnichannel “grey store” model and superior fresh assortment rather than aggressive cash burn.
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