KUALA LUMPUR (Feb 26): Padini Holdings Bhd (KL:PADINI) saw its net profit fall 35.8% year-on-year in the second quarter, dragged by weaker sales and higher operating costs.

Net profit for the three months ended Dec 31, 2025 (2QFY2026) declined to RM41.32 million from RM64.31 million a year earlier.

“The decline was mainly due to higher operational costs, including increased depreciation and the imposition of service tax on rental which took effect as part of the Service Tax scope expansion from July 1, 2025,” said the garment manufacturer in a bourse filing.

Its profitability was hit by higher administrative expenses, which doubled to RM25.46 million in 2QFY2026, from RM12.69 million a year ago and higher finance costs of RM7.18 million, which increased 24.6% from RM5.77 million a year before.

Earnings per share fell to 4.19 sen from 6.52 sen previously.

Quarterly revenue dropped 7.91% to RM484.04 million in 2QFY2026 from RM525.62 million in 2QFY2025.

The group declared a third interim single-tier dividend of 1.8 sen per share — lower than 2.5 sen paid a year ago — payable on March 27, 2026. 

For the first half of FY2026, its net profit fell 18.64% to RM61.7 million from RM75.84 million a year earlier, while revenue declined 3.66% to RM885.1 million from RM918.77 million.

Looking ahead, Padini said retail conditions remain challenging due to weakening purchasing power amid rising costs, trade tensions and inflation.

Nevertheless, management expects the group to perform satisfactorily for the current financial year, supported by cost-control measures and working capital optimisation.

Shares in Padini closed down one sen or 0.5% to RM2 on Thursday, valuing the group at RM1.97 billion.