PETALING JAYA: Eco-Shop Marketing Bhd
is on track for further expansion ahead.
The ultra affordable household retailer is planning to roll out up to 90 new stores in its financial year 2026 (FY26) and is reportedly planning to refurbish up to 20 stores this year.
UOB Kay Hian Research (UOBKH Research) noted Eco-Shop’s same store sales growth (SSSG) had seen a 12.7% year-on-year (y-o-y) decline in the first quarter of FY26 (1Q26) and this was due to factors including a weak consumer sentiment and price adjustment impact.
Other reasons included the high base effect as the previous comparable quarter saw a strong double-digit growth and stocking out of key products.
The research house expects the coming 2Q26’s SSSG to see a slight improvement.
“We retain our minus 6% FY26 SSSG forecast at this juncture as monthly SSSG has been improving and supply chain issues have been resolved,” it said.
“The latter is attributed to reestablishing supply from key biscuit and bread suppliers.”
It also expects that sustained gross margin expansion will support upcoming quarterly earnings.
This as gross margins of some 31.8% in 1Q26 is seen to be sustained as well on the strengthening local currency.
A favourable product mix and the strengthening of the ringgit versus the yuan in April 2025 is seen to sustain it in 2Q26.
“Also promotional pricing of food and beverage products has ended as well.”
The research house upgraded Eco-Shop to a “buy” rating with an unchanged target price of RM1.70 per share.
