PETALING JAYA: The consumer sector has shown resilience despite a challenging first half of financial year 2026 (1H26), with household spending holding up even as the Iran conflict triggered market volatility and pushed up fuel and freight costs.
Hong Leong Investment Bank (HLIB) Research expects the sector’s outlook to improve in the 2H26 as cost pressures begin to normalise.
Fuel and freight costs, which surged between March and April following disruptions linked to the Strait of Hormuz closure, have eased after a peace memorandum was reached in mid-June.
Brent crude prices, which had approached US$120 (RM489) per barrel at the peak of tensions, have since moderated, offering some relief to consumer companies exposed to logistics and packaging costs, according to the research house.
It noted, for example, that cocoa and coffee have eased materially from their 2024/2025 highs, which serves as a margin tailwind for food and beverage processors and quick-service restaurants operators.
The research house said the consumer sector had underperformed the benchmark FBM KLCI on a relative basis, while earnings of companies under its coverage largely met expectations during the first quarter of financial year 2026 (1Q26) results season.
The standout performer was 99 Speed Mart Retail Holdings Bhd
, which delivered a robust 17.5% year-on-year (y-o-y) growth in core earnings for 1Q26, supported by low double-digit same-store sales growth.
However, it said the local consumer sector continued to show resilience into 2Q26 with retail trade in April 2026 growing 6.3% y-o-y, surpassing the 4.7% growth recorded in April 2025.
