Padini’s Q2 earnings double on better sales, lower expenses

PETALING JAYA: Padini Holdings Bhd’s net profit more than doubled to RM33.07 million for the second quarter ended Dec 31, 2015 versus RM16.21 million in the same period a year ago, on higher sales and slower expenses growth.
Revenue soared 38.6% from RM245.59 million to RM340.38 million.
It has proposed to declare an interim dividend of 2.5 sen per share.
While a weaker ringgit has driven up merchandise costs, Padini said its selling prices have remained relatively unchanged as retail sentiment is still low.
“While there is a real need at some future point to increase selling prices to cope with falling gross margins, the reality of the situation discourages that in the short term. Thus we will continue with policies that will drive top-line growth while holding prices steady,” it reiterated.
Padini said whenever opportunities arise, the distribution network must be expanded not just in size but also in geographical and market reach.
“Falling gross margins can then be compensated by rising sales and the resultant larger absolute amount in gross profits would go a long way towards keeping bottomline healthy,” it noted.
The company expects to open another two Padini Concept Stores and three Brands Outlet stores within the financial year, on top of the total nine outlets that have opened within the first seven months of the financial year.
For the first half of the year, Padini’s net earnings surged 83.06% from RM35.45 million to RM64.9 million on the back of a 29.13% increase in revenue from RM472.34 million to RM609.95 million.