KUALA LUMPUR (Feb 25): Padini Holdings Bhd’s (KL:PADINI) second-quarter net profit increased 21.1% year-on-year, largely driven by improved gross margins and stronger festive season sales.

Net profit for the three months ended Dec 31, 2024 (2QFY2025) was RM64.31 million, compared with RM53.10 million a year ago, according to the garment manufacturer in a bourse filing on Tuesday. Earnings per share rose to 6.52 sen, from 5.38 sen in 2QFY2024. The gross profit margin improved to 40% versus 38% in the previous year.

Quarterly revenue was up 5.1% to RM525.62 million, on the back of higher sales.

The company declared a third interim dividend of 1.8 sen per share, payable on March 28, bringing the dividends declared year-to-date to 6.8 sen for FY2025.

For the first half ended Dec 31, 2024 (1HFY2025), Padini’s net profit was down 4.9% to RM75.84 million, from RM79.77 million in the same period last year, due to higher unrealised foreign exchange loss, higher staff costs, and increased depreciation from outlet expansion. 

Revenue for 1HFY2025, on the other hand, increased 3.4% to RM918.77 million, from RM888.30 million in 1HFY2024.

On a quarter-on-quarter basis, Padini’s net profit surged over fivefold from RM11.52 million in the immediate preceding quarter as a result of improved revenue, driven by higher sales during the Christmas and year-end school holiday period. Revenue jumped 33.7% from RM393.14 million in 1QFY2025.

On its business prospects, Padini noted that rising costs, inflation and global trade tensions will pose challenges to retail spending. However, the company remains optimistic that it will deliver “satisfactorily” performance for the current financial year. 

“Management will continue to provide value for money products, and implement measures to control costs, optimise working capital, preserve cash, and streamline operations to minimise any adverse impact,” it said.

Shares of Padini closed down 14 sen or 8% at RM1.61 on Tuesday, valuing the group at RM1.59 billion.