KUALA LUMPUR (May 18): Cuckoo International (MAL) Bhd (KL:CKI) said lower consumer demand and slower customer repayments dragged earnings for the first quarter of financial year 2026.

In a filing on Bursa Malaysia, the home appliances company’s net profit for the quarter ended March 31, 2026 (1QFY2026) fell to RM25.03 million compared with RM27.86 million from the year before. Gross profit fell 5.1% to RM87.2 million, but gross profit ratio improved from 31% to 38.3% on a stronger ringgit and lower average customer acquisition costs.

Revenue also dropped 23.1% to RM227.83 million from RM296.28 million a year earlier, due to lower unit sales. The group attributed the slower consumer repayments to households prioritising other spending habits around the Chinese New Year and Hari Raya festive periods.

Cuckoo Malaysia said a key drag on its earnings also came from net impairment losses on financial instruments, which rose by 47.7% during the quarter.

“In Q1FY2026, we remained focused on disciplined execution and cost efficiency, which helped us sustain profitability amid a more measured consumer spending environment,” said chief executive officer Hoe Kian Choon in a press statement.

As at March 31, 2026, the group’s cash and cash equivalents stood at RM70.5 million, while total borrowings were reduced to RM118.6 million. Shareholders’ equity rose to RM1.1 billion.

Cuckoo Malaysia said it expects consumer spending to remain cautious due to persistent cost-of-living pressures and a softer broader operating environment.

It added that it is focusing on cost discipline, product expansion and wider distribution as it seeks to maintain performance. During the quarter, Cuckoo Malaysia said it expanded its product offerings, strengthening digital rental options through its e-commerce platform and increasing physical retail presence with three brand shops. It has a retail network of over 230 outlets.

The company is also targeting further growth in rental-based offerings, reflecting changing consumer preferences towards subscription or rental arrangements over outright purchases.

“Cuckoo Malaysia remains cautiously optimistic. With consumers increasingly favouring rental arrangements as an alternative to outright purchases, the company is well-positioned to capitalise on this trend,” said the group in the statement.

No dividend was declared for the quarter under review.

Shares of Cuckoo Malaysia were unchanged at 43 sen on Monday’s closing, valuing the group at RM616.1 million. Since its listing on the Main Market last year, its shares have declined by 60.2%.