KUALA LUMPUR (Nov 29): Padini Holdings Bhd (KL:PADINI) said on Friday that the retail business remains tough amid rising cost of living, after the apparel company reported a sharp drop in profits.

Net profit for the first quarter ended Sept 30, 2024 (1QFY2025) fell 57% to RM11.52 million from a year earlier, according to an exchange filing. Padini blamed the decline on currency loss, higher staff costs and depreciation, which offset its 1% year-on-year growth in revenue to RM393.14 million.

The company reiterated that it would continue to implement “measures to control costs, optimise working capital, preserve cash, and streamline the operations to minimise any adverse impact”.

The company nevertheless kept up dividend payouts, with a second interim distribution of 2.5 sen per share — higher than the earnings of 1.75 per share — to be paid on Dec 27.

Despite the potential challenges, “we are optimistic”, Padini said. There was an expansion in the number of stores during the first quarter, Padini noted, without elaborating on the expansion or its plans going forward.

Shares of Padini were down four sen or 1.16% at RM3.40 on Friday, valuing the company at RM2.24 billion ahead of the results announcement. Year to date, stock has retreated 2.75%.