Padini Holdings Berhad: A Strong Q3 FY2025 Performance Amidst Market Headwinds
By Your Senior Financial Blogger | May 29, 2025
Padini Holdings Berhad (Company No.: 197901005918 (50202-A)) has just released its unaudited results for the third quarter ended 31 March 2025, and the numbers tell a compelling story of resilience and strategic execution. Despite a challenging retail landscape, the Malaysian fashion powerhouse has delivered impressive growth in both revenue and profit, capping it off with a generous dividend announcement. This report dives deep into what drove these results and what lies ahead for Padini.
Unpacking the Financial Highlights: A Quarter of Robust Growth
Padini’s latest quarter showcases a significant uplift in financial performance, driven by strategic initiatives and a favourable festive season. Let’s break down the key figures:
Quarter-on-Quarter Performance (Q3 FY2025 vs. Q3 FY2024)
Current Quarter (31 March 2025)
Revenue: RM626.8 million
Profit Before Tax: RM95.7 million
Profit After Tax: RM72.0 million
Basic Earnings Per Share: 7.29 sen
Preceding Year Corresponding Quarter (31 March 2024)
Revenue: RM575.4 million
Profit Before Tax: RM54.7 million
Profit After Tax: RM40.5 million
Basic Earnings Per Share: 4.11 sen
The Group’s revenue climbed by 8.9% to RM626.8 million from RM575.4 million in the same quarter last year. More impressively, profit before tax soared by 75.0% to RM95.7 million, while profit after tax jumped by an astounding 77.6% to RM72.0 million. This significant boost in profitability was primarily attributed to an improvement in the gross profit margin, which expanded from 35% to a healthy 41%.
Year-to-Date Performance (9 Months Ended 31 March 2025 vs. 9 Months Ended 31 March 2024)
Current Year-to-Date (31 March 2025)
Revenue: RM1,545.6 million
Profit Before Tax: RM197.9 million
Profit After Tax: RM147.8 million
Basic Earnings Per Share: 14.98 sen
Preceding Year Corresponding Period (31 March 2024)
Revenue: RM1,463.7 million
Profit Before Tax: RM160.6 million
Profit After Tax: RM120.3 million
Basic Earnings Per Share: 12.19 sen
For the cumulative nine-month period, Padini’s revenue increased by 5.6% to RM1,545.6 million, and profit before tax rose by 23.2% to RM197.9 million. The gross profit margin for the nine months also saw an improvement, from 36% to 39%, underscoring the Group’s enhanced operational efficiency.
Immediate Preceding Quarter Comparison (Q3 FY2025 vs. Q2 FY2025)
Current Quarter (31 March 2025)
Revenue: RM626.8 million
Profit Before Tax: RM95.7 million
Profit After Tax: RM72.0 million
Immediate Preceding Quarter (31 December 2024)
Revenue: RM525.6 million
Profit Before Tax: RM85.9 million
Profit After Tax: RM64.3 million
Compared to the immediate preceding quarter (Q2 FY2025), revenue saw a substantial increase of 19.3%, driven by heightened sales during festive seasons such as Chinese New Year and Hari Raya. However, the profit before tax grew at a slightly lower rate of 11.4%, partially offset by bonus payouts during the quarter.
Segmental Contributions
The Group’s core business, Apparels and Footwear, remains the primary revenue driver, contributing the entirety of the external customer revenue at RM1,545.6 million for the nine months ended 31 March 2025. This segment also accounted for the lion’s share of the segment profit before tax, highlighting its critical role in Padini’s overall profitability.
| Segment | Total Revenue (RM’000) | Segment Profit Before Tax (RM’000) |
|---|---|---|
| Apparels and Footwear | 1,553,069 | 181,624 |
| Management Service | 178,504 | 12,538 |
| Investment Holding | – | 3,631 |
| Others | – | (110) |
| Total (External Revenue) | 1,545,574 | 197,857 |
Financial Health and Prudent Management
Padini’s financial position appears robust. The Group’s total borrowings as at 31 March 2025 stood at RM9.96 million, a notable decrease from RM13.73 million as at 31 March 2024. This reduction in debt signals a healthy balance sheet and prudent financial management, which is crucial in the current economic climate.
Navigating Risks and Charting the Future
While the latest results are undoubtedly strong, Padini acknowledges the persistent challenges in the retail sector. The management has highlighted several potential headwinds:
- Deterioration of purchasing power: Rising living costs can impact consumer spending on discretionary items like apparel.
- Rising cost: Operational costs, including raw materials and logistics, continue to be a concern.
- Trade tensions: Global trade dynamics can influence supply chains and import costs.
- Rising inflation and interest rates: These macroeconomic factors can dampen consumer confidence and increase borrowing costs.
Despite these challenges, Padini’s management remains optimistic about the Group’s satisfactory performance for the current financial year. Their strategy revolves around several key pillars:
- Value for money products: Continuing to offer attractive products that resonate with budget-conscious consumers.
- Cost control: Implementing stringent measures to manage operational expenses.
- Optimising working capital: Efficient management of inventory and receivables to ensure liquidity.
- Cash preservation: Maintaining a strong cash position to navigate uncertainties.
- Streamlining operations: Enhancing efficiency across all business units to minimise adverse impacts.
Shareholder Returns: A Consistent Dividend Payer
Padini continues its commitment to rewarding shareholders. For the financial year ending 30 June 2025, the company has declared and paid three interim dividends:
- First interim dividend of 2.5 sen per ordinary share (single tier), paid on 27 September 2024.
- Second interim dividend of 2.5 sen per ordinary share (single tier), paid on 27 December 2024.
- Third interim dividend of 1.8 sen per ordinary share (single tier), paid on 28 March 2025.
Adding to this, the company announced on 29 May 2025 a fourth interim dividend of 1.80 sen per ordinary share (single tier) and a special dividend of 1.0 sen per ordinary share (single tier) for the financial year ending 30 June 2025, both payable in June 2025. This consistent dividend payout reflects the company’s healthy cash flow and confidence in its financial stability.
Summary and Outlook
Padini Holdings Berhad’s Q3 FY2025 report paints a picture of a well-managed company that is not only achieving strong financial results but also proactively addressing market challenges. The significant growth in revenue and profit, coupled with an expanding gross profit margin, demonstrates the effectiveness of their operational strategies.
Key takeaways from this report include:
- Robust Profit Growth: A substantial increase in profit before and after tax, both quarter-on-quarter and year-on-year, driven by improved gross profit margins.
- Festive Season Boost: Strong sales during major festive periods contributed significantly to revenue growth in the current quarter.
- Prudent Financial Management: A noticeable reduction in total borrowings, indicating a healthy balance sheet.
- Shareholder-Friendly Policies: Consistent dividend payouts, including a recently declared fourth interim and special dividend, signal confidence.
- Proactive Risk Mitigation: Management is well aware of market headwinds and has clear strategies to control costs and optimize operations.
While the retail environment remains competitive and consumer purchasing power faces pressures, Padini’s focus on value-for-money products and operational efficiency positions it well to navigate these challenges. The management’s optimism for a satisfactory performance in the current financial year seems well-founded given these results.
