Padini remains cautious about raising prices amid heightened consumer price sensitivity in the current retail environment.
PETALING JAYA: Padini Holdings Bhd
’s gross profit margin for financial year 2026 (FY26) is expected at 39.2%, which is within the group’s target range of 36% to 40%, according to TA Research.
It said the performance is expected to remain promising, led by higher contributions from better-margin segments such as activewear and intellectual property products amid persistent cost pressures.
Its technological enhancements are expected to improve operational efficiency, further supporting margin stability, according to the research house.
A sustained appreciation of the ringgit could provide further cost relief in the second half of 2026.
TA Research maintained its “buy” call with a target price of RM2.40 a share, based on 12 times 2026 earnings per share.
“The stock offers an attractive valuation and a compelling investment story, supported by initiatives expected to sustain sales and preserve margins in FY26,” it said.
Despite ongoing cost pressures, Padini remained cautious about raising prices amid heightened consumer price sensitivity in the current retail environment.
Nevertheless, a strong value proposition and product affordability would be key to sustaining sales volumes, TA Research pointed out.
The recent sales and service tax on rental and leasing services reduction to 6% from 8%, should help mitigate the overall impact of higher operating costs stemming from rental, labour and depreciation expenses, it added.
On a full-year basis, the research house estimated an incremental cost of RM8mil to RM15mil in FY26, representing 0.4% to 0.8% of total FY26 operational expenditure.
As at FY25, Padini operated 149 domestic outlets, with annual lease payments of RM145mil.
Padini renovated 16 stores in FY25 and in FY26 and planned to renovate 11 existing stores besides opening five new outlets.
