KUALA LUMPUR (May 26): Padini Holdings Bhd (KL:PADINI) said it will continue to implement cost-control measures after its third-quarter earnings were dragged down by higher operating expenses, including increased depreciation and service tax on rental and other costs following the expansion of the sales and service tax scope last July.

The fashion retailer reported a 15.88% decline in net profit for the quarter ended March 31, 2026 (3QFY2026) to RM60.54 million, compared with RM71.97 million a year earlier, as revenue edged lower to RM624.45 million from RM626.81 million amid softer top-line sales, according to its filing with Bursa Malaysia.

Despite the weaker performance, Padini declared a fourth interim dividend of 1.8 sen per share and a special dividend of two sen per share for the financial year ending June 30, 2026 (FY2026), both payable on June 29. This brings total dividends declared year to date to 9.2 sen per share versus 8.2 sen post-bonus issue in FY2025.

With the latest quarterly earnings, Padini achieved a net profit of RM122.24 million for the first nine months of FY2026, down 17.3% from RM147.81 million in the same nine-month period in FY2025, as revenue dipped 2.33% to RM1.51 billion from RM1.55 billion. The cumulative earnings were also weighed by higher administrative expenses and costs for selling, distribution and finance.

Padini said the retail sector remains challenging amid weakening consumer purchasing power due to rising costs, ongoing trade tensions, as well as elevated inflation and interest rates.

Nevertheless, the group remains cautiously optimistic of delivering a satisfactory performance for FY2026. “Management will continue to offer value-for-money products while implementing measures to control costs, optimise working capital, preserve cash and streamline operations to mitigate any adverse impact,” it said.

Padini was in the spotlight last month after some of its bank accounts, along with those of several subsidiaries, were frozen by the Malaysian Anti-Corruption Commission (MACC) in connection with an investigation involving external counterparties.

Shares of Padini rose one sen or 0.71%, to close at RM1.42 on Tuesday, giving the group a market capitalisation of RM1.4 billion. The stock had earlier slipped to a five-year low of RM1.41 on May 21.

Year to date, the counter has fallen over 21%.