PETALING JAYA: Analysts expect Padini Holdings Bhd
’s near-term earnings outlook to be dampened by softer consumer sentiment and the post-festive slowdown.
Visibility is also expected to remain clouded by ongoing Malaysian Anti-Corruption Commission (MACC) investigations.
In a note, CIMB Research said Padini’s results for its third quarter ended March 31, 2026 (3Q26) fell short of its estimates.
The company’s 3Q26 core net profit fell 16.0% year-on-year (y-o-y) to RM60.8mil, bringing year-to-date core net profit to RM126mil, a 17.1% y-o-y decline.
“The miss was mainly due to higher operating expenses and softer top-line performance on weaker sales volumes, despite both Chinese New Year and Hari Raya Aidilfitri falling within the quarter,” the research house added.
Consequently, it cut its financial year 2026 to (FY28) earnings per share forecasts for Padini by 7.4% to 11.0%.
It predicted weaker quarterly results for 4Q26 as festive demand was frontloaded into 3Q26, which is likely to be compounded by rising inflationary pressures as consumers prioritise essentials over discretionary spending.
“We believe Padini’s mass-market positioning should allow it to capture some downtrading demand and attract value-driven consumers,” it added.
“Margins should also be supported by a firmer ringgit/yuan and tighter cost discipline.”
It also noted that the company declared a special dividend per share (DPS) of two sen in 3Q26, bringing the year-to-date DPS to 9.2 sen, which exceeded its expectations.
CIMB Research maintained its “buy” call on Padini with a lowered target price of RM1.80, down from RM2.
Meanwhile, TA Research primarily attributed Padini’s weaker performance to increased costs from higher depreciation expenses and the impact of the 6% sales and service tax imposed on rental and leasing services.
It added that the near-term sentiment continues to be weighed by the unresolved MACC investigations, which have resulted in the freezing of 21 accounts.
“Nevertheless, the group’s FY26 outlook is expected to remain intact, as its business operations and bank accounts continue to function as usual, with no major cash flow constraints anticipated in the near term.”
BIMB Research downgraded its “buy” recommendation on the stock to “hold”, with a lower target price of RM1.57, from RM2.40 previously.
