PETALING JAYA: Padini Holdings Bhd
’s near-term financial performance may benefit from festive demand even though the upside remains limited, given the seasonal nature of the boost, says Apex Research.
It expected a seasonal uplift in the third quarter of financial year 2026 (3Q26) performance before normalising in 4Q26 in the absence of festive-driven spending.
Thus, it maintained its “hold” call with an unchanged target price of RM1.80 a share, based on the 12.3 times price to earnings ratio applied to its FY26 earnings per share of 14.6 sen.
The risks cited for its call include increasing competition, weaker consumer spending patterns and rise in material costs can affect the group’s overall profitability.
It did not make any changes to its financial forecast.
It said gross profit margin for the first half of FY26 strengthened to 39.8%, supported by reduced markdown activity in recent quarters.
The group has also been expanding its intellectual property product offerings, including collaborations with Sanrio, which typically command higher margins and enjoy broader product appeal.
“Taking into account the typically stronger festive-driven margins in 3Q, we expect margins to remain within the group’s 36% to 40% guidance, with its FY26–FY27 gross profit margin assumptions maintained at 39%.”
Padini planned to open five to six new stores in FY26 as part of its ongoing expansion pipeline.
In addition, the group intended to renovate at least 10 existing outlets, which may provide incremental support to sales performance in the coming quarters.
In FY25, a total of 16 stores were renovated, which historically resulted in a modest 3% sales uplift post-renovation.
Potential sales from store expansion and refurbishment could be partly offset by softer consumer sentiment.
